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Profit and loss is a fundamental concept in business, economy, and accounting. Critical to many business presentations, profits and losses often need to be clearly and concisely communicated. Often a company will need to present information on expected or actual profits, losses, and risk to company stakeholders.
Gross profit: Revenue from sales minus the cost of the goods that were sold.
Operating profit: Gross profit minus the expenses of operating.
Net profit: Any income left after cost of goods, operating costs, and all other expenses have been taken out.
Operating Loss: When a company sells their goods for less than the expenses needed to make them.
Net Loss: When all sources of revenue add up to less than the total cost of all expenses.
Risk: In business, risk is the exposure a company has to factors that will lower its profits.