📈 Metrics

Profit

What's left after you pay for everything.

Formula

Profit = Revenue − Cost

Profit is the money a business keeps after paying all its costs. It's the single most common thing a case asks you to fix.

When profit falls, it's either because less money came in (revenue) or more money went out (cost). Deciding which one is your first move.

How to break it down

Profit

Revenue

Cost

🧮 Example

A café earns ₹10 lakh a month and spends ₹8.5 lakh. Profit = ₹1.5 lakh. If rent rises by ₹1 lakh, profit drops to ₹50k even though sales didn't change.

🎯 Interview tip

Say out loud: “I'll first check whether the drop is revenue-led or cost-led.” It instantly sounds structured.

Used in

Consulting cases Operations cases M&A cases

Learn next

Profitability framework

The go-to structure for ‘profits are down — why?’

Fixed vs variable costs

Costs that stay put vs costs that grow with sales.

Contribution margin

What each extra unit adds towards covering fixed costs.

The Case Flex weekly

One concept. One case breakdown. One practice prompt. Every week, in simple words.

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