Profit

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Profit

Meaning

Profit is the money you earn when your revenue is higher than your total expenses. In simple terms, profit means the money left after paying all costs.

Example :

For instance, if a shop earns ₹1,00,000 in sales and spends ₹70,000, the profit is ₹30,000. If you buy gold for ₹50,000 and sell it for ₹60,000, your profit is ₹10,000.

How to Understand :

1.Profit is different from revenue; profit is what remains after you pay for everything.

2.There are different types of profit:

•Gross profit: Money left after covering production costs.

•Operating profit: Money earned from regular business activities.

•Net profit: Final profit after paying taxes and all other expenses.

3.High profit indicates good pricing, effective cost control, and efficient management.

Importance :

1.Profit measures how successful and sustainable a business is.

2.It helps businesses expand, open new branches, and upgrade technology.

3.High profits attract investors because they expect better returns.

4.Profit builds financial strength and creates reserves for emergencies.

5.It encourages innovation and entrepreneurship.

6.Profit contributes to the economy through taxes and job creation.

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Profit Meaning

Example :

How to Understand :

Importance :

Profit

Meaning