What is Accounting Profit?

Profit is a surplus in money after taking into account all costs incurred in buying and selling a product. Operating profit is the profit made after all direct and indirect costs have been paid. (Bized, 2010a) From NEXT’s company accounts, the operating profit has increased by £51.5m. This is a positive steady increase which has been achieved throughout the

Profitability is an important criterion to judge the success of the business. Accounting has a big role in determining business profitability. Using accounting we can maintain proper records of all business dealings, which later on assists in computing business profitability. It is only accounting due to which we can easily make financial statements at the end of each accounting year and find out the profit earned or loss suffered in the business. Thus, Accounting provides us significant information which we further analyze and come up with material conclusion or decision.

Paying high taxes and the future market size can be classified as weaknesses which can affect Alothaim in a negative way.

A contingency that might result in a gain usually should not be reflected in the financial statements because to do so might be to recognize revenue before its realization.

A profit and loss account is supposed to show a businesses’ income and expenditures and calculate the company’s net profit or loss based on the difference between those numbers. It is really useful in determining past performance and to try to predict future

Profit is the money that a business earns in revenue, minus investments, and the cost of salaries.

A profit and loss account is intended to show a business its income and expenditures and calculate the company’s net profit or loss based upon the difference between those figures. It is extremely useful in determining past performance and to try and predict future results. It enables a business to see what changes could make to improve on its profit. It also give enough information to help a business to set targets.

Accounting aspects have been several in amounts. They lay out ground rules for succeeding in

* Accounting Profit – What a firm makes when total revenue is greater than total cost

A review of a company’s profitability lets investors or managers know how efficiently a company is operating. There are three key ratios to review. The profit margin, return on equity and return on assets. The profit margin is the net income divided by sales. The higher the profit margins the better. The return on equity is net income divided by total equity (Cornett, Adair & Nofsinger, 2009).. This can help to determine the amount of financial leverage the company is using. The return on assets is the net income divided by total assets. This can also help determine the financial leverage the company is using in regards to its assets (Cornett, Adair & Nofsinger,

(which is revenue minus cost of good/services) after taking out operating expenses - such as cost of goods sold and depreciation ,basically performed on the accrual basis. The revenue are recognized in the period actually earned and cash need not to be received on that period for recognizing the revenue. Therefore net cash flow and operating profit is different

created as an accounting concept and accountants decide what it is. Profit doesn’t exist in

Accounting profit is the profit that would appear on your accounting statement that you would report to the government for tax purposes.

I agree with Kevin’s statement that financial statements provide only a partial look at the picture when valuing a company. While providing the financial data such as sales, expenses, gross profit, total assets and liabilities, and net worth it leaves out the internal influences that most influence the bottom line.

In contrast, by employing accounting perspective, in terms of traditional metrics for performance measurement, managers cannot fully consider the required shareholder¡¦s return on invested capital. In addition, accounting principles are often easy to manipulate and can vary from one country