Financial Glossary: Profit Center


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Profit Center

Profit Center

The branch or division of a company that creates profits individually and separately from the main organization.

The profit center's revenues and expenses are held separate from the main company's in order to determine their profitability. Profit Centers are parts of a Corporation that directly add to its Profit.

Managers are held accountable for both revenues, and costs (expenses), and therefore, profits.

Usually the different profit centers are separated for Accounting purposes so that the management can follow how much profit each center makes and compare their relative efficiency and profit. Examples of typical profit centers are a store, a sales organization and a consulting organization. Profit centers can measure profitability of business units or departments.

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