Profits can be distributed to shareholders as dividends or reinvested by the corporation.
In business, profit is the income of a company minus the cost of goods sold, depreciation, expenses, amortization, and taxes for an accounting period
The way profits are managed is important for the growth of a company. In this case, Profits can be distributed to shareholders as dividends or reinvested by the corporation.
In this case, when a corporation earns a surplus, it is able to pay part of the profit as a dividend to the shareholders and the amount not distributed is taken to be re-invested in the business.
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