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What is profit?
We can define profit as the financial advantage obtained when the income generated by a commercial activity exceeds the expenses, costs, and taxes associated with the activity in question. Return on profits is to business owners, who can choose to take the money or put it back into the company also. Entire revenue less total costs equal profit.

Firstly, profit is the amount of money a company earns after deducting all expenditures. Whether its a lemonade stand or a publicly listed multinational corporation, the basic purpose of every business is to make money. Therefore a companys performance can predict profitability in its different forms.

How to calculate profit
Also when it comes to the calculation of profit, we can calculate the profit by deducting direct and indirect costs from total sales. Purchases like materials, also employee compensation are examples of direct expenses. Indirect expenditures, such as rent and utilities, we sometimes know as overhead costs.