Explained
It depends on the stock valuation method. In integrated systems its entry is recorded with every sale, so true profit is known without waiting for a count.
Related terms
- Moving average costMoving average cost values stock by recalculating the average unit cost at every receipt, and issuing each unit at the average of its moment.
- Income statementAn income statement shows a business’s revenue and expenses over a period; the difference is the net profit or loss.
- Profit marginProfit margin is profit relative to the selling price — different from markup, which is relative to cost.