Recent Examples of profit center from the Web
The chip unit, now controlled by Bain Capital, was Toshiba’s biggest profit center.
Big Marijuana routinely targets vulnerable communities as its profit centers.
North Korea’s arsenal has long been one of the isolated country’s few profit centers.
For his part, Mr. Stevens has contributed to the restructuring of GM’s operations in South America and Korea, and to turning the company’s in-house lending arm into a profit center.
Last week, Toshiba completed the sale of its main profit center, its flash-memory semiconductor business, to a consortium led by U.S. private-equity firm Bain Capital, although Toshiba will retain a 40% stake.
The department uses liaisons throughout the city to keep abreast of the concerns of local residents, but prosecutors say that Mr. Reichberg considered the post as both a public-service job and a personal profit center.
While some mark-up is necessary—three times wholesale is generally considered acceptable, to cover the cost of service—the wine list is too often treated as the restaurant’s prime profit center.
Another profit center for network navies is the deletion of negative posts on social media sites by aggressive use of sites' moderation flagging, hacking, or paying off insiders with administrative access to various platforms to delete the posts.
These example sentences are selected automatically from various online news sources to reflect current usage of the word 'profit center.' Views expressed in the examples do not represent the opinion of Merriam-Webster or its editors. Send us feedback.
Financial Definition of PROFIT CENTER
What It Is
A profit center is a part of a company that directly adds to its profits.
How It Works
A company may have a variety of distinct departments, divisions, or operating groups, each with separate responsibilities and each contributing to the overall success of a company. Cost centers, for example, such as accounting, auditing, or inventory control, have costs, but do not contribute revenues. As a result, they do not produce profits. A profit center, on the other hand, is directly involved in producing revenues, and, if it is managed well, its revenues exceed its costs and it produces a profit.
Why It Matters
A profit center must be carefully managed to ensure that the sales generating activities lead to more revenues than the cost of those activities, thus producing a profit. Creating separate profit centers within a company allow the management to evaluate the profitability of each unit or business activity. When assessing a company, it is useful for an investor to classify various components of a business into cost and profit centers, allowing the investor to evaluate the prospects of various divisions on a stand-alone or restructured basis and the allocation or elimination of the costs found in the cost centers.
Learn More about profit center
Seen and Heard
What made you want to look up profit center? Please tell us where you read or heard it (including the quote, if possible).