What is the role of profit in business?

1.	What is the role of profit in business?
Answer» Profits play a vital role in any business. Earning of profits is essential for any business because of the following reasons given below: Means of Livelihood: Profits act as a means of livelihood for the entrepreneurs. Without profits, entrepreneurs cannot continue with the business. Rewards for taking risks: It provides returns for taking risks. Funds for Growth: It would provide funds for growth of the business. Symbolic of efficiency and efficacy: Profits symbolise that management is efficient and business is operating in a healthy manner. Enhancement in goodwill: A business making higher profits has a better goodwill and reputation in the market

Answer»

Profits play a vital role in any business. Earning of profits is essential for any business because of the following reasons given below:

Means of Livelihood: Profits act as a means of livelihood for the entrepreneurs. Without profits, entrepreneurs cannot continue with the business.
Rewards for taking risks: It provides returns for taking risks.
Funds for Growth: It would provide funds for growth of the business.
Symbolic of efficiency and efficacy: Profits symbolise that management is efficient and business is operating in a healthy manner.
Enhancement in goodwill: A business making higher profits has a better goodwill and reputation in the market

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