profit

Profit is the financial gain that results when the revenue from an activity or investment exceeds the total costs incurred. It represents the surplus remaining after deducting expenses such as operating costs, taxes, interest, and depreciation from gross income.

Profit serves as a core measure of business performance and sustainability. It is generally categorized in three forms: 

• Gross profit (revenue minus the direct costs of producing goods or services),
• Operating profit (gross profit minus operating expenses), and 
• Net profit (the final earnings after all expenses, taxes, and interest). 

Net profit is often referred to as the “bottom line” because it appears at the end of an income statement and reflects the company’s ultimate profitability.

In both corporate and legal contexts, profit is distinguished from revenue, which refers only to total income before any expenses. Courts and regulators often consider profit when evaluating issues such as damages, antitrust violations, and shareholder rights. For example, profit calculations may determine whether a fiduciary has unjustly enriched themselves at the expense of a business or its investors.

[Last reviewed in September of 2025 by the Wex Definitions Team] 

Keywords

• llcs-corporations-partnerships

Wex

• COMMERCE
• commercial activities
• accounting
• wex definitions