Media Informasi - Profit or profit can be defined in 2 ways :
- Profit in Pure Economics is defined as an increase in the wealth of an investor as a result of his capital investment, after deducting the costs associated with the investment (including opportunity costs).
- Profit in accounting is defined as the difference between the selling price and the cost of production.
Profit is the element that most concerns the user because more numbers are expected to be rich enough to represent the company's overall performance. However, the accounting till now has not reached steadiness in meaning and profit measurement. Therefore, unlike the elements of other financial statements, the discussion of profit includes three levels :
- Semantics
- Syntactics
- Pragmatics
From the standpoint of accounting engineers, the concept of profit is developed to meet the objectives of providing information about the company's performance widely. meanwhile, information users have different goals. Profit accounting theory faces two approaches, first profit for various goals or different goals different earnings. Accounting theory is directed to formulate profit with the first approach. Concepts in the semantic level include the interpretation of profit as a measure of performance, confirmation of investor expectations, and estimates of economic earnings. Although accounting should not be able to measure and present economic profit, accounting should at least provide profit information that can be used by users to measure the economic profit that turn to determine the company's economic value.
Eating profits in general is an increase in prosperity in a period that can be enjoyed (distributed or withdrawn) provided that initial prosperity is maintained. This kind of understanding is based on the concept of capital retention. This concept distinguishes between profit and capital. Capital is meaningful as the stock of potential services or prosperity while profit is a flow (flow) of prosperity. With the concept of capital retention can be distinguished between returns or investments and return on investment as well as between operations transactions and owner transactions. Furthermore, profits can be viewed as net asset changes so that various basic capital valuations can be applied.
Profit is the increase in capital (net asset) derived from a rare by-product or transactions of a business entity, and from all transactions or other events having a business entity during one period, except that arising from the revenue or owner's investment ( Baridwan, 1992: 55).
The general understanding of earnings is the difference of income over its expenses within a certain period (period). Profit is often used as a basis for taxation, dividend policy, investment guidance as well as decision making and the elements of prediction (Harnanto, 2003: 444).
The general understanding of earnings is the difference of income over its expenses within a certain period (period). Profit is often used as a basis for taxation, dividend policy, investment guidance as well as decision making and the elements of prediction (Harnanto, 2003: 444).
In economic theory is also known the term profit, but the understanding of profit in the theory of eonomy is different from the understanding of profit by accounting. In economic theory, economists interpret profit as an increase in corporate wealth, whereas in accounting, profit is the difference in realized revenues from transactions occurring at a time compared to expenses incurred in a given period (Harahap, 1997).
Earnings or losses are often utilized measures to assess company performance or as a basis for other assessment measures, such as earnings per share. The elements that form the part of profit-making are revenues and costs. By classifying the elements of income and expenses, different earnings measurements can be obtained, among others :
Earnings or losses are often utilized measures to assess company performance or as a basis for other assessment measures, such as earnings per share. The elements that form the part of profit-making are revenues and costs. By classifying the elements of income and expenses, different earnings measurements can be obtained, among others :
a. Gross profit
b. Operational profit
c. Profit before tax
d. Net profit
b. Operational profit
c. Profit before tax
d. Net profit
Reasons for profit maximization:
- The principle of salvation (George stigler) states that the surviving company of all time is the one who is looking for the highest return. Non-profit-oriented business units will be crushed by efficient firms.
- Low profits invite a corporate takeover. Stock prices will be low (fall) if management fails to run its business efficiently (get a high profit).
Economic profit :
- The meaning of profit is the difference between total revenue (TR) and total cost (TC).
- Costs consist of explicit costs and implicit costs.
Three approaches find maximum profit (maximum) :
- The total approach (total approach)
- The average approach
- Marginal approach (marginal approach)
Minimize cost:
The implication of the profit maximization that the firm will choose the method to produce a certain output at the lowest cost
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