Definitions 
Profit (or gross profit) is an accountancy term for the amount of money an organisation made in any one year. We will not go into the details of accountancy rules here, but will look at a simple example:
As an example, let us take a simplified look at a supermarket:
Cost of goods sold: $30 million
Income from goods sold: $60 million
Salaries: $10 million
Utility costs: $5 million
We calculate the profit as follows: 60 - 30 - 10 - 5 = $15 million.
Use of Profit
Most companies will need to pay corporation tax on this profit. Management then have a choice between retaining profits or returning money to shareholders via issuing dividends or undertaking a share buy back program.
