Profit, or net income, is one of the most important aspects and indicators of a company's success and health. It is calculated as total revenue minus total expenses and is the measure of how much money a business has left over after all expenses have been paid. This "bottom line" amount, also referred to as net profit (or net loss in the case of negative profitability), is one of the main metrics used by investors to measure a company's worth, and is typically what is paid out in the form of dividends to stockholders each financial quarter.

To better understand and measure the components of a company's total profit, the figures are also broken down into three main categories: gross profit, operating profit, and net profit. Gross profit, also known as gross margin, is the first step in determining a company’s profitability, and is calculated by subtracting the cost of goods sold from total sales. Operating profit, also known as operating income, is another measure of profitability, which subtracts all operating expenses related to normal business activities (e.g., general administrative costs, depreciation, marketing) from the gross profit. Finally, net profit is the total of all profits left after taxes, interest payments, and other additional non-operational costs are deducted from the operating profit.

A company's profitability is highly sought after and can make a company more attractive to investors; high profits are often associated with financial stability, increased stock value, potential access to more financing options, and the ability to pay higher dividends. Additionally, with more profits, a company can better invest in itself and its growth, including investing resources into its technology, expanding its operations and workforce, and increasing research and development. While a company may not always report profits, it is very important to understand that profits are the lifeblood of a company's long-term growth and success.