profits and loss

profit definition

occurs when revenue of a business are greater than its total costs

profit calculation

sales revenue - cost of sales

profit as an objective

• survive

• reinvest profits for expansion

• provide security and savings

• reward employees

• generate wealth for the owner

• act as an incentive to start a business

loss

if a business costs are greater than its revenues then it will make a loss

interest

total repayment - borrowed amount/borrowed amount x 100