What is Profit?

The term profit refers to monies that are left over when revenue from a particular business activity is greater than the combined expenses/costs that are required to sustain the business over a given time period.

Profit belongs to the business owner(s) and may be reinvested in the business or not.

How to calculate profit: Profit = Total Revenue – Total Expenses

There are three different types of profit that can impact a business: Gross Profit, Operating Profit, Net Profit.

See also: Loss

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