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The profit remaining for a reporting period after recognised income and the applicable costs, financing charges and taxes are taken into account.
Save conceptNet profit is the earnings remaining after the income statement accounts for the relevant costs and expenses. It is also commonly called net income or net earnings. A company can report rising sales but only a small profit increase if its expenses grow quickly. The profit figure must be read with its reporting scope and period.
The income statement starts with and adjusts for recognised costs and expenses, including the relevant financing charges and income taxes. can also affect the result. The final profit or loss is an accounting measure for that period. Whether it belongs to a single company or a group determines which operations the figure covers.
Imagine a hypothetical retailer earns J$2 million in and has J$1.8 million of recognised expenses, including all applicable interest and tax in this simplified example. Net profit is J$200,000. If next period rises to J$2.2 million while expenses rise to J$1.99 million, profit becomes J$210,000. Profit increased, but much more slowly than sales.
Net profit is not the same as cash generated or cash available to distribute. Customer payment timing, inventory purchases and equipment spending can make cash movements differ from accounting earnings. excludes specified charges and therefore is a different measure. Neither a profit number nor its growth rate automatically establishes the sustainability of future earnings or a guaranteed shareholder payment.
DMart sales rise faster than profit as quarterly margins narrow