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Profit before tax |
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Profit before taxA company's net profit before deduction of corporation tax.Similar MatchesProfit and loss statement (P&L)Profit and loss statement (P&L)A set of accounts, usually prepared annually, which depict a company's trading performance and are normally read in conjunction with the balance sheet and cash flow data. The profit and loss account can broadly be shown as follows:Turnover (sales) less manufacturing costs (or cost of sales if for example a retailing company) = gross profit or lossGross profit plus any non-trading income less operating costs = operating profit Operating profit less interest payments on bank loans or loan stock = profit before tax (pre tax profit)Pre-tax profit, less tax = net profit after taxPart of the net profit after tax may be used to pay a dividend with the balance being retained within the business for future investment. Profitability indexProfitability indexThe present value of the future cash flows divided by the initial investment. Also called the benefit-cost ratio. Not for profitNot for profitAn organization established for charitable, humanitarian, or educational purposes that is exempt from some taxes and in which no one in profits or losses. Realized profit (or loss)Realized profit (or loss)A capital gain or loss on securities held in a portfolio that has become actual by the sale or other type of surrender of one or many securities. Profit marginProfit marginOperating profit as a percentage of sales (or turnover). To calculate profit margin, multiply operating profit by 100, and divide the result by turnover.Example: Company X made an operating profit of £500m on a turnover of £3,000m. Profit margin was therefore (500 x 100) / 3000= 16.66%Profit margin tells you about the underlying profitability of a company's trading activities, not whether it is actually making money for shareholders. Note that it is calculated before taking account of interest charges or tax. Further SuggestionsWindfall profitprofit taking Risk adjusted profitability Profit taking Pretax earnings or profits Full with profit endowment paper profit Profit maximizing Profit Table unitised with profits Profitability ratios net profit before tax (pre tax profit) gross profit Profit margin Profit Gross profit margin Directly Unproductive Profit-Seeking Activities Net profit margin Zero profit operating profit Accumulated profits tax Excess profit profit sharing scheme Profit margin Profit Range |
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