Finance Definition
Profit
📈 Investing
basic

Quick Definition

Profit is the financial gain realized when the revenue from business activities exceeds the expenses, costs, and taxes involved in sustaining the activity.

Formula

Profit = Revenue - Expenses

Examples

  • 1A company sells a product for $150 that costs $100 to produce and market, resulting in a $50 profit.
  • 2An investor buys shares at $200 and sells them at $250, making a $50 profit per share.
  • 3A bookstore purchases a novel for $10 and sells it for $15, earning a $5 profit on each book sold.

Tags

profitrevenueexpensesfinancial-gainbusiness
Related Terms
Other terms you might find helpful
Gross Margin
Gross margin is a financial metric that measures the percentage of total sales revenue that exceeds the cost of goods sold (COGS). It indicates how efficiently a company uses labor and supplies in the production process.
Operating Income
Operating income, also known as operating profit, represents the total earnings from a company's core business operations, excluding non-operating income, taxes, and interest expenses.
Quick Info
Category:Investing
Difficulty:basic
Last Updated:6/20/2025