profit center

noun

Definition of profit center

: a part of a corporation or its product line that is an important source of profits

Examples of profit center in a Sentence

Recent Examples on the Web Gas prices also were high, chasing any remaining buyers away from GM’s main profit centers in the U.S., pickup trucks and SUVs. San Diego Union-Tribune, "Despite labor costs, GM averts financial woes of its past," 18 Oct. 2019 Now that Disney has bought Twentieth Century Fox to become the industry’s biggest studio (and profit center), those fears are more justified than ever. Ann Hornaday, Washington Post, "Scorsese is right about Marvel. Except when he’s wrong.," 7 Nov. 2019 Energy production accounts for more than 70 percent of emissions, according to the non-profit Center for Climate and Energy Solutions. James Osborne, Houston Chronicle, "Global energy growth of 50 percent by 2050, EIA predicts," 24 Sep. 2019 Each episode looks at a crossroads moment as the network evolved into an important rallying point for Republicans and a massive profit center for the Murdochs. chicagotribune.com, "Roger Ailes series on Showtime likely to rile the right and the left," 26 June 2019 China, after all, is still a relatively small profit center for American business. Stephen Gandel, CBS News, "Why U.S. trade war with China could be real downer for your 401(k)," 8 Aug. 2019 Video games, for example, represent Tencent’s largest current profit center and its biggest current headache. Adam Seessel, Fortune, "Valuation: Could WeChat Sink Tencent’s Stock?," 25 July 2019 The privately run, for-profit center is operated by Comprehensive Health Services, a unit of the large contracting company Caliburn. Adam Edelman, NBC News, "What is “Homestead?”," 1 Aug. 2019 Tesla executives have frequently said its Supercharger network is not intended as a profit center for the company and the money charged, about 28 cents per kilowatt hour, is just to cover costs. Peter Valdes-dapena, CNN, "High-speed charging station networks are growing," 1 Aug. 2019

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.

See More

First Known Use of profit center

1955, in the meaning defined above

Keep scrolling for more

Learn More about profit center

Time Traveler for profit center

Time Traveler

The first known use of profit center was in 1955

See more words from the same year

Statistics for profit center

Last Updated

10 Dec 2019

Cite this Entry

“Profit center.” The Merriam-Webster.com Dictionary, Merriam-Webster Inc., https://www.merriam-webster.com/dictionary/profit%20center. Accessed 15 December 2019.

Keep scrolling for more

More Definitions for profit center

profit center

noun

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.

Source: Investing Answers

More from Merriam-Webster on profit center

Rhyming Dictionary: Words that rhyme with profit center

Comments on profit center

What made you want to look up profit center? Please tell us where you read or heard it (including the quote, if possible).

WORD OF THE DAY

delight or enjoyment

Get Word of the Day daily email!

Test Your Vocabulary

Great Scrabble Words—A Quiz

  • scrabble tiles that read scrabble quiz
  • Which of the following Q-without-U words means the number five in cards or dice?
Spell It

Can you spell these 10 commonly misspelled words?

TAKE THE QUIZ
Syn City

Test Your Knowledge - and learn some interesting things along the way.

TAKE THE QUIZ
Love words? Need even more definitions?

Subscribe to America's largest dictionary and get thousands more definitions and advanced search—ad free!