What is profit:

Profit is the financial gain a business makes after deducting all expenses, including production costs, operational costs, taxes, and other expenditures, from its total revenue. It is the actual earnings that remain and determine the financial health of a company.

What is revenue:

Revenue is the total income a business earns from its core activities, such as selling goods or services, before deducting any expenses. It represents the gross earnings and is a key indicator of a company's financial performance. Revenue can come from various sources, including product sales, service fees, subscriptions, and investments. It is also known as sales or turnover and serves as the foundation for calculating profit.

The effects of profit:

• Higher profit allows reinvestment, business expansion, and higher dividends.

• Profitability ensures long-term sustainability and financial health.

• Low or negative profit can lead to business losses and potential closure.

The effects of revenue:

• Higher revenue can lead to business growth and expansion.

• Strong revenue attracts investors and improves market valuation.

• Low revenue may indicate poor sales, leading to financial instability.

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