"Profit play an important role in the business". Give any four reasons to justify the statement.
"Profit play an important role in the business". Give any four reasons to justify the statement.
Profit plays an important role in the business because :
(a) For long - term survival : Profits alone help a business to continue to exist for a long time. It has been observed that for achieving other economic as well as social objectives, profit must be earned. The business in which the profit is meagre or no proft is earned closes down quickly.
(b) For rapid growth : Profit provides a sound financial structure for the growth and expansion of the business
(c) Increases the efficiency of business : It acts as an incentive, motivating workers to contribute their maximum worth to the enterprise. Profit increases with the increase in efficiency and improved performance of the organization.
(d) For building reputation and recognition : If the business earns adequate profits, it will pay fair and competitive wages to its employees, dividends at competitive rates to shareholders, and so on. In other words, all the parties can be satisfied. This helps the business to earn reputation and goodwill in the society.
Profit plays an important role in the business because :
(a) For long - term survival : Profits alone help a business to continue to exist for a long time. It has been observed that for achieving other economic as well as social objectives, profit must be earned. The business in which the profit is meagre or no proft is earned closes down quickly.
(b) For rapid growth : Profit provides a sound financial structure for the growth and expansion of the business
(c) Increases the efficiency of business : It acts as an incentive, motivating workers to contribute their maximum worth to the enterprise. Profit increases with the increase in efficiency and improved performance of the organization.
(d) For building reputation and recognition : If the business earns adequate profits, it will pay fair and competitive wages to its employees, dividends at competitive rates to shareholders, and so on. In other words, all the parties can be satisfied. This helps the business to earn reputation and goodwill in the society.
