Profits refer to the financial gain that a business makes after subtracting all its expenses from its total revenue. This figure is crucial for assessing a company's performance and sustainability. Profits can be reinvested into the business, distributed to shareholders, or used to pay off debts. There are different types of profits, including gross profit, operating profit, and net profit. Gross profit is the revenue left after deducting the cost of goods sold, while operating profit accounts for operating expenses. Net profit is the final amount after all expenses, taxes, and costs have been deducted, representing the true earnings of a business.