Essay On Importance Of Profit

Profit is surplus which is remained after total costs are deducted from the total revenue. Profit is the amount you get after tax is paid and the shares are dividend. Profit is very important because profit shows how successful a business is. CSR is corporate social responsibility and CSR means being aware of the impact their business have on the society including their stakeholders and the environment. CSR can aim for better working conditions, human rights, health and safety, corporate governance and contribution to economic development. Although there is no fixed definition of CSR its main aim is to reach environmental sustainability. Businesses are aiming to be called a CSR organisation by carrying out corporately and socially responsible …show more content…
More profit means the owner of the business have more money to use for their wants and needs which leads to personal enjoyment. Aiming for profit can further lead to enlargement of the business, as it gives good expectation to bidder or investors which attracts them for investments towards the business. Profit shows how successful a business is and when the business is successful people tend to invest more. More profit tends to help businesses get stable meaning companies don’t need to save money for expansions or get into debt. Other advantages of profit is that when the business earns more profit it will allow them to borrow more money easier as it has a good reputation of earning a lot of profit. Profit allows the company to reshape their business for instance, hiring more employees, expansion and etc. A good example of a high revenue company is Facebook with a 2.4 billion dollar profit at the third quarter 2016. However aiming for profit is a very risky gamble that a business must take. The disadvantages of only aiming for profit is public concern, the public will dislike and not consume a company’s product if the company is not responsible for its destruction. Also aiming for just profit can lead to products not satisfying the consumer’s demand, for example Samsung’s recent case of exploding Galaxy Note 7. Samsung Galaxy Note 7 has recently been exploding due to problems in the battery, so Samsung announced their apology and has released a new statement which states that all Galaxy Note 7 owners should return their Not 7 for either refund or a change with Samsung s8. Due to this catastrophe Samsung’s revenue dropped from 7.3 trillion KWR to 5.2 trillion KWR, this is the risk that the companies must take. Also another disadvantage of profit aiming is the expectation they have, the company will aim for cutting cost which might not satisfy suppliers, employees or