Gross profit
The profit remaning after direct costs are subtracted from sales, but before any expenses are deducted. |
Similar financial terms
Gross marginThe percentage of gross profit (sales minus direct costs) to sales, which should remain fairly consistent when sales rise or fall.
Effective gross income
Normal annual income including overtime that is regular or guaranteed. The income may be from more than one source. Salary is generally the principal source, but other income may qualify if it is significant and stable.
Gross
The aggregate, cumulative or total amount is a quantity measure. It can refer to total long position, total short position, the total par position, total market value, the total futures contract equivalency position or other specified categorization.
After-tax profit margin
The ratio of net income to net sales.
Risk-adjusted profitability
A probability used to determine a "sure" expected value (sometimes called a certainty equivalent) that would be equivalent to the actual risky expected value.
Profitability ratios
Ratios that focus on the profitability of the firm. Profit margins measure performance with relation to sales. Rate of return ratios measure performance relative to some measure of size of the investment.
Profitability index
The present value of the future cash flows divided by the initial investment. Also called the benefit-cost ratio.
Profit margin
Indicator of profitability. The ratio of earnings available to stockholders to net sales. Determined by dividing net income by revenue for the same 12-month period. Result is shown as a percentage.
Operating profit margin
The ratio of operating margin to net sales.
Net profit margin
Net income divided by sales; the amount of each sales dollar left over after all expenses have been paid.
Before-tax profit margin
The ratio of net income before taxes to net sales.
Book profit
The cumulative book income plus any gain or loss on disposition of the assets on termination of the SAT.
Profit and Loss Account
An accounting statement that shows a company's trading position over a given period of time - usually the financial year. This statement details the sales revenue and business expenditure over the period. In the account, the cost of sales is deducted from the sales income to provide a gross profit. From this, other items of expenditure, such as salaries, rent, rates and other itemised costs are deducted to show a net profit (or loss). In US and under IFRS known as the Income Statement.
