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Profits for Dummies

noun

pronunciation: 'prɑfɪts

What does Profits really mean?

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Profits are like the sweetest fruits of our labor, the rewards we reap for our hard work and smart decisions. When we talk about profits, we're talking about the extra money that remains after all the costs and expenses have been paid. It's the surplus, the cherry on top, that businesses and individuals earn for their efforts. It's like the extra allowance you might get for doing your chores exceptionally well!

Imagine you have a lemonade stand - you buy lemons, sugar, cups, and ice to make the lemonade, and you spend some money on advertising to let people know about your refreshing drink. After all these expenses are taken care of, let's say you sell your lemonade for $1 per cup, and you manage to sell 50 cups in a day. After subtracting the costs, you find that you have made $30 in profits. These profits are yours to keep, to save, or to reinvest in your business, like buying more lemons or expanding your stand. They are the positive outcome of your hard work and clever pricing.

Apart from this simple explanation, profits can also be defined as the financial gain or reward that businesses or individuals earn from their investments or commercial activities. It is the excess amount of money generated when the total revenue (income from sales or services) exceeds the total expenses (costs of production, operating costs, etc.). Profits can come from different sources, like sales of products, provision of services, or investments in stocks or real estate.

Understanding profits is essential because they're an important measure of success and performance. They indicate whether a business is doing well or not, whether it's profitable or losing money. Think of profits as a report card for how well a business is doing financially. When a business earns profits, it can use that money to grow, expand, and hire more people. On the other hand, if a business constantly operates at a loss, it may struggle to survive or even have to shut down.

So, my young learner, always remember that profits are the sweet fruits of our hard work and smart decisions, the extra money we earn after paying all the costs and expenses. They are the rewards that motivate us to keep moving forward and to make our lemonade stand, or any other venture, a success.

Revised and Fact checked by Robert Taylor on 2023-10-28 16:49:53

Profits In a sentece

Learn how to use Profits inside a sentece

  • When a store sells many toys and makes more money than it spent to buy them, it earns profits.
  • If someone sells lemonade for $1 per cup and it only costs them $0.50 to make each cup, they can make a profit of $0.50.
  • A farmer grows vegetables in their garden and sells them at the market. If they earn more money from selling the vegetables than they spent on seeds and water, they make profits.
  • A company makes and sells t-shirts. If they sell a lot of t-shirts and the money they receive is more than what they spent on materials and labor, they can make profits.
  • A person starts a small business making handmade crafts. If they sell their crafts for a higher price than the cost of materials and tools, they can earn profits.

Profits Synonyms

Words that can be interchanged for the original word in the same context.

Profits Hypernyms

Words that are more generic than the original word.

Profits Hyponyms

Words that are more specific than the original word.

Profits Meronyms

Words that are part of the original word.