Us Pharmaceutical of Korea

719 WordsAug 3, 20123 Pages
Profit Profit - the difference between the purchase price and the costs of bringing to market. - Is any amount of money that is left over from a company after all financial expenses have been paid. It is the money they are able to save once the business purchases have been made. - Is the money a business makes after accounting for all the expenses. - The positive gain from an investment or business operation after subtracting for all expenses. Opposite of loss. Different profit concepts 1. Normal profit is the minimum level of profit needed for a company to remain competitive in the market. - Occurs at the point at which the resources available to the firm are being efficiently used and…show more content…
Components of a profit and Loss Statement Revenue - Is the total earned from ordinary business operations. Revenue includes sales of goods and services, interest received, dividends, rebates, and rent received. Cost and goods sold (COGS) - Is the cost of the merchandise sold during the period. COGS includes all the costs directly attributable to the acquisition or conversion of inventories such as: • The purchase price, • Import duties, • Non-recoverable taxes, • Freight insurance, • Handling, • Direct labor, and • Other cost of converting materials into finish goods. COGS vary directly with sales and production; the more items you sell or make, the more stock or components you need to buy. Gross Profit - Is the difference between sales and the cost of producing or purchasing products or providing services before subtracting operating expenses such as wages, rent, accounting fees, or electricity. Gross profit reflects how efficiently labor and materials are used to produce goods. Gross profit = Sales – Cost of goods sold Expenses - Expenses (overheads, outgoings) are costs incurred for the purposes of earning income. They include items such
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