Profit

• Ways to improve profitability

  • Increase revenue e.g : have a sale, reduce the prices, advertise more
  • Reduce cost e.g: restructuring, delayering and redundancies or automating production, outsourcing.
• • Gross profit is total revenue minus the expenses directly related to the production of goods or the cost of goods sold (COGS).
  • Derived from gross profit, operating profit is the residual income after accounting for all costs.
  • Net income reflects the total residual income (money a company has left after meeting it's financial obligation) after accounting for all cash flows, both positive and negative.
• Income statement vs balance sheet