Profit Center

A profit center is a part of a business responsible for generating its own revenue and profit. Think of it as a specific division or unit that operates like a mini-business within the larger company, with its own sales, expenses, and financial results. This setup helps management evaluate how well that part is performing independently. For example, a retail chain might have separate profit centers for different store locations or product lines, allowing the company to see which areas are most profitable and make better strategic decisions.