Profits are a fundamental financial metric, representing the surplus revenue after all expenses. Essential for businesses, investors, and economic analysis,...
Profit is the financial gain realized when a business's total revenue from sales or operations exceeds its total costs and expenses over a specific period.
Key types include Gross Profit (revenue minus cost of goods sold), Operating Profit (gross profit minus operating expenses), and Net Profit (operating profit minus interest and taxes).
Profits are crucial for business sustainability, funding growth, reinvestment, paying dividends to shareholders, attracting investors, and serving as a key indicator of financial health and operational efficiency.
Companies measure profitability using various metrics such as profit margins (gross, operating, net), Return on Equity (ROE), and Return on Assets (ROA), often analyzed over time and against industry benchmarks.