There could be a variety of answers to this question, depending on what perspectives you use to answer them. ( accounting, economics etc ). Using my understanding of Economics, it's important to first have an equation to link all these variables. Profit = Revenue - Cost. This is called the profit equation, where profit equals revenue minus cost. Revenue is the sales that you obtain from day to day sales. It's expressed in a monetary value. For example, if I am able to sell 10 hotdogs today at US dollar 5 for each hotdog, then my revenue for the day will be US Dollars 50. However this is my revenue and not my profit, as I incurred cost while earning this revenue. Lets say the cost of this business is US Dollars 3. If this is the case the profit will be 50 - 3 which equals 47. Hence profit is 47. This equation shows that an increase in cost, can reduce the profit. At some instances, the increase in cost can increase revenue, depending on the price that you are selling and also the quantity sold. This will depend on how large the increase is. Generally if Revenue is more than cost, there is profit, while if Cost is more than revenue that is lost. If Revenue equals Cost, there is break even. This means that the profit is zero. Hope this helps. (cheong@bgymail.gd.cn)
Cost implications refer to the financial impact of a decision or action. It involves assessing how the decision will affect expenses, revenue, or profitability of an organization. It is important to consider cost implications when making business decisions to ensure financial sustainability and efficiency.
Revenue is the income into the company from Sales or the provision of services. Profitability is an assessment of the companies performance where Revenue & Expenditure are compared and the difference is a profit or loss which thereby indicates the profitability of the business. In simple terms its' ability to make a profit or not.
Profitability
profit margin = net income / total revenue
profit margin = net income / total revenue
Non recognition of revenue in the relevant month will ü Lead towards inconsistent application of matching principle ü understate monthly profit Affect profitability ratios
Measure of profitability in relation to sales revenue, this ratio determines the net income earned on the sales revenue generated. Formula: Net income x 100 ÷ Sales revenue.
it doesn't cost is cost revenue is revenue
cost/revenue x100%
liquidity is how quickly an item can be converted to cash, usually to pay short term debts, profitability is how much money an entity has after taking sales revenue - cost of goods sold...so gross margin
Yes, outsourcing do increase profitability and it also helps companies in saving for the cost of labor.
To increase profitability!