Profits are any financial rewards you reap when running a business. These rewards are calculated after subtracting the total expenses involved in running your business activity from the revenue you generated. This will give you a dollar amount before tax. If you subtract tax from it, that figure is called the net profit.
For example…
When Tom wanted to calculate his profits for the past financial year, he added up the costs of running his pet store, including the money he spent on acquiring, cleaning and vaccinating the animals, paying rent for his shop as well as other products that would be useful for pets. He then subtracted this amount from his revenue which included cash flow generated by the sale of animals and products. When he did this, he realised he had a profit of forty thousand dollars before tax. Not a bad outcome after all. I wonder if he has a Corgi for sale…r if he has a Corgi for sale…
