Starting a business specializing in portraiture

Started 11 months ago | Discussions thread
johnbandry
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Re: Correct definitions please
In reply to PenguinPhotoCo, 11 months ago

PenguinPhotoCo wrote:

The term profit is thrown around here like crazy, and usually inaccurately.

Very true

Profit is money left over after all expenses are paid.

No it isn't.

What you're describing is cash flow. There are many views of profit, some purely for tax purposes, but they include things like depreciation/amortisation, accruals, provisions. Revenue can be deferred. Assets can be revalued or written down. Profit has very little to do with "money" (i.e. cash) other than that it is measured in units of currency.

But, and this is important its SPLIT AMONG THE OWNERS.

Again, no it isn't. Those are dividends you're thinking of.

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John Bandry

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