Management Glossary

  Search Results: profit
profit
In general, revenues minus costs. However, in accounting terms, profit is not equivalent to cash flow. The difference is a result of accounting's attempt to match costs to the period in which a benefit is derived (for example, the value of buildings and equipment are "depreciated" over their expected useful lifetime rather than including the entire cost at the time it is purchased. Likewise, revenue is accounted for when it is earned rather than when the cash is actually received.)
Contributed by: ManagerWise Staff
See: cash flow, revenue, depreciation

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