Wishes and explain

Profit refers to what is left of revenue after all business expenses are paid. It means that a profit is made when revenue exceeds expenses. The profit that a business generates goes to the owners who then decide whether they want to take the money for themselves or reinvest it in the business. It is common advice for startup companies to reinvest as much of their profit as possible. This directly grows the company's cash reserves, enabling it to invest more capital into operations. Accounting larger cash reserves like this also serve a purpose beyond making economic investments. If a company has substantial cash reserves, it stands as an attractive investment opportunity to outside investors. Substantial cash reserves suggest that the company can withstand externalities like economic downturns. Moreover, if the owner reinvests profits, it shows investors that he/she is serious about expanding his/her enterprise. This factor of growth plays a critical role in investors' decisions to invest. 

What is the definition of profitability in business? Where the definition of profit refers to the amount of revenue that exceeds expenses, profitability refers to the company's ability to make that profit. Profitability is naturally an important component in the success of any business. Turning a profit is the entire driving force behind running a business. This makes it an integral part of external investors' decision to invest in the company.