What Is a Profit?

Video Transcript

"This is financial adviser Patrick Munro discussing a basic term in capitalism called what is a profit? Businesses exist for really many reasons, but one of the most important business terms that you quickly come to realize is profit. Profit is really what is left over in a business after you pay all expenses that are associated with the operation of that business, including the cost of goods or services, and whatever the difference is between what you're selling to the end users of course, profit. And we mean after tax profit as well. Many companies have a wide difference between their profit and say a different business as profit, and this is called profit margin. There are certain companies that have a very wide profit margin and there are other companies that have a very narrow profit margin. However, they make up for that narrow profit margin by selling a very high volume of a narrow profit margin. So they too can still be successful. Profit is a very key indicator in the success and health of a company and that is a key term in capitalism. This is Patrick Munro, financial advisor, discussing that very important term to businesses, what is profit?"