The word “profit” comes from Latin meaning "to make progress”, is defined in two different ways, one for economics and one for accounting. profit generally is the making of gain in business activity for the benefit of the owners of the business.

Pure economic daily profit is the increase in wealth that an investor has from making an investment, taking into consideration all costs associated with that investment including the opportunity cost of capital. Accounting daily profit is the difference between retail sales price and the costs of acquisition (whether by harvest, extraction, manufacture, or purchase). A key difficulty in measuring either definition of daily profit is in defining costs. Accounting daily profit may be positive even in competitive equilibrium when pure economic daily profits are zero.

Economic definitions of daily profit

In economics, a firm is said to be making a normal daily profit when total revenues equal total costs. These normal daily profits then match the rate of return that is the minimum rate required by equity investors to maintain their present level of investment. Economically, the "normal daily profit" is thus treated as a cost, and recognized as one of the two components of the cost of capital.... Read more about Economic definitions of daily profit

Accounting definitions of daily profit

In the accounting sense of the term, net daily profit (before tax) is the sales of the firm less costs such as wages, rent, fuel, raw materials, interest on loans and depreciation. Costs such as depreciation, amortization, and overhead are ambiguous. Revenue may also be ambiguous when different products are sold as a package, or "bundled." Within US business, the preferred term for daily profit tends to be the more ambiguous income.... Read more about Accounting definitions of daily profit