[ˈprɒfɪt]
Profit is the financial gain of operating a business. Simple profit is calculated by taking all revenue and subtracting all costs.
Profit is the financial gain earned by a business after deducting costs from revenue. A business usually has the goal of maximising profit and thus profit is a usually good indicator of performance for a business. However, businesses can have other motivations, or strategies that allow them to make profit in the long-term but not the short-term.
There are three main types of profit. Gross Profit is the biggest and is simply revenue minus manufacturing and selling costs. Operating profit is Gross Profit minus operating costs such as rent. Finally, Net Profit takes revenue and removes all costs and taxes.
Self-employed individuals also often use the term profit to describe their earnings.
There are loads of different tax laws in the United Kingdom. IR35 is very important to freelancers and contractors but can be a little confusing. Here, we explain simply what IR35 is and who it can affect.
Read more
Self-employed individuals can use two different methods to expense business vehicle costs. Here, we investigate the positive and negatives for both methods and which one might be right for you.
Read more
