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It may sound obvious, but in managing a business, it is essential for the management to be aware of the way the business earns a profit. A commercial enterprise demands very good financial model and a well defined earnings model. A business sells goods or professional services and makes a certain amount of margin on every single unit sold. The quantity of items sold in a given time span is the turnover in the financial period. The company subtracts the total amount of fixed expenses in the interval to arrive at the operating profit before interest and taxes.

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