Carlos Miguel Villegas Basic Finance

II-A BSBA MM

WHY PROFIT A
REQUIREMENT
IN
BUSINESS?

When we're hearing phrases such as profit and requirement, our minds
immediately turn to business. The main objective of the business is to generate
profits, in line with its definition. The profit of the company is the financial gain
resulting from the difference between the amount of revenue earned and the
amount of expenditure incurred. Therefore, every company begins with capital
and needs to be profitable so that it can operate for a long time. For this reason,
the company needs to make a profit. Profit makes it possible for entrepreneurs to
return the capital they have put into their businesses, enabling them to run and
survive on a sustainable basis. It is used to evaluate the efficiency and
profitability of a company, driving its growth and development. If we're making
more than we're spending, it's not just the success of the company, it's also the
risk it's willing to take. In addition, for other investors and suppliers, profits are a
key driver of the firm. As a result, the business can receive more funding and
resources from these third parties, resulting in a win-win situation. One example
is that, if you make more profit, you can create a larger range of products and
services which allows us business owners to operate, develop, expand, or offer
different types of goods and services to our clients and customers.