What is meant by Average Profit?

Average profit is the average of profit earned by the firm on the specified number of previous years i.e, Total of sum of specified previous year profit is divided by specified number of previous year. Average profit = Total sum of profit of specified previous year profit ÷ Total number of previous year.

Example:

The three year profit of the company abs is given below

<img alt="profit data" class="img-reponsive" loading="lazy" title="" profit="" data"="" data-cke-saved-src="https://apiengine3.home-tution.com/webroot//files/profit.png" src="https://apiengine3.home-tution.com/webroot//files/profit.png">