Profit Center
Definition
A part of a business that is accountable for both its revenues and its costs, and therefore its profit, such as a product line or branch. It allows performance to be measured unit by unit.
Related Terms in Business Terms
Authorised Capital
The maximum amount of share capital a company is permitted to issue under its constitution. It sets a ceiling; the company may issue less, which becomes its issued capital.
Paid-Up Capital
The amount of share capital that shareholders have actually paid for, as opposed to merely subscribed. It represents the real equity funding the company has received from issuing shares.
Share Premium
The amount received for shares above their nominal or face value. It is recorded in a separate reserve and its use is usually restricted by company law.
Capital Structure
The mix of debt and equity a business uses to finance its operations and growth. The balance affects risk, cost of capital and returns to owners.
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