• Showroom7561@lemmy.ca
    link
    fedilink
    arrow-up
    0
    ·
    10 months ago

    In business, you can’t predict what your expenses will be next year or in 10 years, so you need profit to act as a buffer. Some years, your revenue exceeds your expectations, and you profit that year.

    This could allow you to spend more money on those legitimate business expenses next year, or bank it for years when your expenses exceed your revenue.

    Even a non-profit has to have leftover to bank for the future, expand, etc.

    But consistently having billions in profit tells me that there’s a massive problem somewhere, and it’s more than likely as a result of wage theft or gouging customers.

    • queermunist she/her@lemmy.ml
      link
      fedilink
      arrow-up
      0
      ·
      edit-2
      10 months ago

      That’s not what profit is either! Funds that are set aside for future expenses or to act as a buffer are also just business expenses.

      Profit is purely the money that is left after all that shit. Profit is the money the business owner and/or shareholders take for themselves, after everything (investing, saving, wages, everything) has been subtracted. Profit is literally only the money they take for themselves.

      Your impression isn’t unique - most Americans don’t really understand what profit is. But like I said, profit is theft and it always has been.

      • Showroom7561@lemmy.ca
        link
        fedilink
        arrow-up
        0
        ·
        10 months ago

        Yeah, I guess that’s how modern corporations are using profits.

        I come from a small business and charity background, so salaries/wages/employee benefits would be considered a business expense. Profits would be banked and used to cover expenses in the future.

        • queermunist she/her@lemmy.ml
          link
          fedilink
          arrow-up
          0
          ·
          10 months ago

          It’s different on a small scale because the line between “business expenses” and “personal expenses” can sometimes get blurred. Though technically, if the money is earmarked for future use then it is definitely not profit. That’s a business expense.