Profit is the financial gain obtained by deducting total expenses from revenue generated by the business. It is an end result of efforts put in to sustain & grow the business organization. Profit gained in the business is the owner’s wealth who may or may not decide to re-invest again in the same business for future growth.
The difference between the amount invested & amount spent in a business entity determines profit margin. The Profit margin is the best indicator of the financial health of the business. If the profit margin is good, then we can assume that all the business processes are running in streamline & furthermore firm can re-invest this profit margin in order to grow further.