Definition of profit center
: a part of a corporation or its product line that is an important source of profits
What's Trending Now
More Trending Words
Recent Examples of profit center from the Web
-
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.
-
Pitaro inherits a unit that is still a major profit center for Disney but has struggled with continued cable subscriber losses and escalating fees paid to sports leagues.
-
This month, Common Sense Media and the non-profit Center for Humane Technology launched a campaign to explore the mental health consequences of technology.
-
At its core, wine is a profit center for a restaurant.
-
Airlines stick close to their profit centers, just like a pit boss watching the blackjack tables.
-
Following the year-long assessment of Cleveland's pluses and minuses, conducted by the non-profit Center for Community Solutions and the city's Department of Aging, an action plan emerged.
-
She is scheduled to travel Tuesday to West Virginia to visit Lily’s Place, a non-profit center that provides care for infants born with prenatal exposure to opioids or other drugs.
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.
First Known Use of profit center
1955
Financial Definition of PROFIT CENTER
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
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).
