What is Profits?

Profits are the difference between revenues and costs. In a trade transaction, profit is the difference between the price at which you sell a good and the price at which you bought it. Running a business, net profit is what is left out of turn-over after paying suppliers, workers, financing institution, and the state.

Distributed profits are the income source of the owners of business. As a social group, they are called "owners" or "capitalists". The part of the value added not distributed as wages, interests, and taxes, remain within the firm to finance investments.