profit center
Cash-producing division
A profit center is a division or unit within an organization that generates revenue and is accountable for its own profits and losses.
Companies track profit centers separately to evaluate performance: The consulting division is our most profitable profit center.
The term contrasts with cost center, which incurs expenses but doesn't directly generate revenue.
Revenue from goods moved
- earningsMoney gained from work
- incomeRegular monetary receipts
- marginEdge of a page
- turnoverSales volume or attrition
cashflow · top line · bottom line · revenue stream · yield · return · gain · contribution margin
Splitting into parts
- subsidiaryOf lesser importance
- departmentDistinct unit within organization
- segmentDistinct part of whole
- branchDivision or woody limb
affiliate · business unit · franchise · regional office · product line · service line · holding · enterprise
Increase in size
- expansionIncrease in scope
- competitive advantageFactor enabling market outperformance
- market penetrationSales presence in sector
- diversificationExpanding into varied areas
value creation · scalability · synergy · strategic planning · portfolio management · divestiture · spin-off · restructuring
Profit-to-cost ratio
- capitalWealth used for investment
- equityImpartial treatment or ownership value
- assetsOwned items of value
- return on investmentProfit relative to cost
capital expenditure · reinvestment · venture · appreciation · hurdle rate · payback period · shareholder value
Allocating funds systematically
- forecastingEstimating future conditions
- resource allocationAssigning available means strategically
- performance managementOverseeing and improving work quality
- cost controlManaging expenses systematically
efficiency · productivity · optimization · operations · leadership · decision-making · capacity planning
Conveying documented information
- financial statementsFormal records of transactions
- ledgerFinancial record book
- auditFormal accounts examination
- complianceAdhering to requirements
transparency · oversight · internal controls · performance metrics · KPIs · fiduciary duty · governance · due diligence
sales
Revenue from goods moved
turnover · cashflow · top line · bottom line · revenue stream · yield · return · gain · contribution margin · operating income
division
Splitting into parts
- subsidiaryOf lesser importance
- departmentDistinct unit within organization
- segmentDistinct part of whole
branch · affiliate · business unit · franchise · regional office · product line · service line · holding · enterprise · operation
growth
Increase in size
- expansionIncrease in scope
- competitive advantageFactor enabling market outperformance
- market penetrationSales presence in sector
diversification · value creation · scalability · synergy · strategic planning · portfolio management · divestiture · spin-off · restructuring
ROI
Profit-to-cost ratio
- capitalWealth used for investment
- equityImpartial treatment or ownership value
- assetsOwned items of value
return on investment · capital expenditure · reinvestment · venture · appreciation · hurdle rate · payback period · shareholder value
budgeting
Allocating funds systematically
- forecastingEstimating future conditions
- resource allocationAssigning available means strategically
- performance managementOverseeing and improving work quality
cost control · efficiency · productivity · optimization · operations · leadership · decision-making · capacity planning
reporting
Conveying documented information
- financial statementsFormal records of transactions
- ledgerFinancial record book
- auditFormal accounts examination
compliance · transparency · oversight · internal controls · performance metrics · KPIs · fiduciary duty · governance · due diligence
- income sourcessalary, wages, hourly pay, wage, commission
- budgetsbudget, budgets, annual budget, capital budget, cash budget
- organizational unitsdepartment, division, branch, unit, section
- accountingbookkeeping, ledger, balance sheet, general ledger, accounts payable
- financial analysisnet income, EBITDA, ROI, gross margin, net margin
- financial controlsinternal controls, auditing, internal audit, financial oversight, checks and balances
profit centercost center
Unit tracked by expenses
money pit · loss leader · overhead · administrative burden · liability
profit, center, profits, profited, profiting, profitable, profitability, profitably, profiteer