The word "contribution" actually stands for "contribution to fixed expenses and overheads."
What does the term "profit" mean?
What is gain? The economic benefit a business has when revenue exceeds costs and expenses is frequently referred to as profit. One cup of lemonade, for instance, costs a child at the a lemonade stand one quarter. She then charges $2 for the beverage. She made $1.75 in profit here on cup of lemonade.
Why is profit such a big deal?
The company's earnings are calculated as revenues minus costs. Profitability influences whether a business can get bank financing, attract investors to fund its operations, and grow. Businesses cannot survive if they are not turning a profit.
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