Question

Explain the importance of profit in business.

Answer 1

Retained profits are an important source of finance for any business, but especially start-up or small businesses. The moment a product is sold for more than it cost to produce, then a profit is earned which can be reinvested.

Answer 2

Answer: profits are very important for any business. Profits have enhanced the growth and development of a company or industry.

Explanation:

Earning profits is a key objective for small scale industries and small businesses. Profits are the most important sources for the progress of business. A company or industry can run their businesses based on profits without earnings there is no development.

When a business moves in a profitable way investors have to keep their stocks in rising companies.

Goodwill is also more important for earning profits.

If companies gain profits they have a chance to increase their equity position, automatically when the Business growth and company value also increased.