What do we call the amount of money a retailer keeps after expenses are subtracted from revenue?

The amount of money a retailer keeps after subtracting expenses from revenue is referred to as profit. Profit represents the financial gain obtained when the total revenue exceeds the total costs associated with running the business. It is a crucial metric for evaluating the performance and viability of a retailer, as it indicates how effectively the business is managing its resources and operations to generate income.

Understanding profit is essential for retailers to make informed decisions regarding pricing, budgeting, and investments. Profit is often highlighted in financial statements as it reflects the company’s ability to sustain its operations and provide returns to investors.

While net income is another term that can sometimes be used interchangeably with profit, it typically refers to a more specific measure after all expenses, including taxes and interest, have been deducted. Gross margin, on the other hand, relates to sales revenue minus the cost of goods sold, but does not account for other operating expenses. Revenue, simply put, is the total income generated from goods and services before any expenses are taken into account.