profit
The financial gain remaining after all expenses and costs have been deducted from revenue.
Example
“The company made a profit of $2 million last quarter after paying all expenses.”
Memory Tip
PROFIT is what PROGRESSES to you after costs. Revenue minus expenses = profit.
Why It Matters
Understanding profit helps you evaluate whether a business, investment, or personal financial endeavor is truly successful and sustainable. It shows you the actual money left over after all obligations are paid, which determines if something is worth your time and resources or if it needs adjustment.
Common Misconception
Many people confuse profit with revenue and assume that higher sales automatically mean more profit. In reality, a business can have massive revenue but actually lose money if expenses and costs exceed what was earned from those sales.
In Practice
Imagine you start a small bakery with revenue of 50,000 dollars per year. After paying 20,000 dollars for ingredients, 15,000 dollars for rent, 10,000 dollars for utilities, and 3,000 dollars for other expenses, your profit is only 2,000 dollars. This 2,000 dollars is what you actually keep, which tells you whether the bakery is truly viable or needs changes to be worthwhile.
Etymology
From Latin 'profectus' meaning 'progress, advance' — financial progress after expenses.
Common Misspellings
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See Also
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