What are the types of profit in accounting?

In accounting, there are three main types of profit: gross profit, operating profit, and net profit. Gross profit is the difference between revenue and the cost of goods sold. Operating profit is the difference between gross profit and operating expenses, such as salaries, rent, and utilities. Net profit is the final amount left after deducting all expenses, including taxes, interest, and other non-operating costs. This represents the overall profitability of a business and is a key metric used by investors and stakeholders to assess the financial health of a company.

This mind map was published on 24 September 2024 and has been viewed 50 times.