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to stay in business and pay wages, otherwise the alternative is break even or make a loss and those options do not make sense. what is the point of breaking even, the whole point is to make money, that is the only reason for business.

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Q: Why profit is important to the business?
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Why profit is not important to a business?

Profit is important to businesses because it is how they continue to remain open. When a business isn't profitable it will cease to exist.


Why is cost important in business?

because the lower the cost the more profit the business makes profit = revenue - cost


Why is profit requirement of business?

If a business is not making a profit then they are losing money if this continues a business will reach a point in which it will have no money and declare bankruptcy.


How can the business show a profit and yet be overdrawn at the bank?

A business' profit is absolutely unrelated to its bank balance.


Is profit cash?

Finance - What is Profit?Profit is a very important concept for any business - particularly a start-upProfit is the financial return or reward that entrepreneurs aim to achieve to reflect the risk that they take.Given that most entrepreneurs invest in order to make a return, the profit earned by a business can be used to measure the success of that investment.Profit is also an important signal to other providers of finance to a business. Banks, suppliers and other lenders are more likely to provide finance to a business that can demonstrate that it makes a profit (or is very likely to do so in the near future) and that it can pay debts as they fall due.Profit is also an important source of finance for a business. Profits earned which are kept in the business (i.e. not distributed to the owners via dividends or other payments) are known as retained profits.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.Profit can be measured and calculated. So here is the formula:PROFIT = TOTAL SALES less TOTAL COSTSHere is an example which illustrates the formula in action:

Related questions

Why is profit important for a business?

profit is important for a business because without profit there is no business. they need to generate profit to keep the business alive. profit well help the move up the business ladder to become a more successful business !


Why is profit important to a business?

because business is all about the large profit at low budget


Why profit is not important to a business?

Profit is important to businesses because it is how they continue to remain open. When a business isn't profitable it will cease to exist.


Why retained profit is important to a business?

retained profit is important to a business because it helps in maintaining the business secrets as the business is using the internal source of finance, is also important because it is a way of saving interest


Why is profit important to businesses?

If there is no profit the business fails because thats the reason for the business in the first place. :-)


Why is cost important in business?

because the lower the cost the more profit the business makes profit = revenue - cost


Why is profit important to a business owner?

Profit is an important reward to business owners since in setting up and running the business the owners are taking a risk with their money. They make nothing if the business does not generate a profit. This also applies to shareholders, since they are also the owners.


Why is profit important?

profit is important because profit represents the surplus working captial with company so to take care of its day to day operations In brief, "no profit, no business."


What is it important for business manager to know the size of a gross and loss profit of a business?

It is important to know the size of a gross and loss profit for a business, because this is the only way to set a budget. It is important in making sure that goals are met throughout the year as well.


Is profit the only business of business?

profit is not a business of business .But the business runs with a small inception of profit


Why is the study of accounting important?

it is important because accounting allow us to monitor the profit of the business


What is the connection between profit costs and expenses?

Profit, costs, and expenses are important within any business' profit and loss statements. The connection is that anything that is more than the costs and expenses of a product or service offered by a business is profit.