What businesses can do with profits

Most business either runs at profits or loss in any given financial year.When the businesses make profits then it is a plus for the business's as the business's can sustain themselves well economically but when the business's make losses then it is minus for them as the business's will have huge burden in expenses which have to be met and the business's will have to look for other strategies to make it stay afloat with the market dynamic factors.So during financial year when the business had made more sales and incur less expenses,then the business will have made profits as sales is more than expenses,here,when expenses is subtract from sales,the result will be positive value.Loss is made when the business incur more expenses than sales during any financial year,this is when the business has made sales but the total values of sales is less than alot of expenses which the business had incurred.So the value of expenses is more than the values of sales,when we subtracts expenses from sales,the value is negative.By subtracting expenses from the sales and the value is positive then gross profits is made and while taxes is subtracted from the said gross profits then net profits is made.The performance of the business is based on the net profits.The more the net profits the better the business is performing economically.

The following are ways in which the business can do after making profit during any financial year:

The businesses can use the net profits to expand the existing business by purchasing more items/stocks for sell or by increasing its existing services.

The business can use the net profits to open more branches so as to reach more customers in different geographical regions/locations.

The business can invest the net profits in other businesses, such as investing the profits either by starting other businesses ventures which are not related to the current business or by simply investing the profits in the stock markets.The business can also either invest the profits in real estates or investing the profits by depositing it in a fixed deposit accounts at the bank so as to earn hire interest.

The business can also use the net profits to merge with other business or the business can simply acquire other business franchise by purchasing all shares of that franchise.

The business can use some of the net profits to give incentives to the employees so as to motive them to work even more harder and smarter.

The business can also use the net profit by investing in the latest technology or by purchasing more efficient equipments/facilities so as to make the business to perform even more better economically.