PROFITS. The advance in the price of goods sold beyond the cost of purchase. See Delaney v. Van Aulen, 84 N. Y. 23.
The gain made by the sale of produce or manufactures, after deducting the value of the labor, materials, rents, and all expenses, together with the interest of the capital em ployed.
An excess of the value of returns over the value of advances.
The excess of receipts over expenditures; that is, net earnings. Connolly v. Davidson, 15 Minn. 519 (Gil. 428), 2 Am. Rep. 154.
The receipts of a business, deducting cur rent expenses; it is equivalent to net receipts. Eyster v. Board of Finance, 94 U. S. 500, 24 L. Ed. 188 ; Lepore v. Loan Ass'n, 5 Pa. Super. Ct. 276.
This is a word of very extended signifi cation. In commerce, it means the advance in the price of goods sold beyond the cost of purchase. In distinction from the wages of labor, it is well understood to imply the net return to the capital of stock employed, after deducting all the expenses, in,luding not only the wages of those employed by the capitalist, but the wages of the capitalist himself for superintending the employment of his capital or stock. Adam Smith, of Nat. b. i. c. 6,. and M'Culloch's Notes; Mill, Polit. Econ. c. 15. After indemnifying the capitalist for his outlay, there common ly remains a surplus, which is his profit, the net income from his capital. 1 Mill, Polit. Econ. c. 15. The word profit is generally used by writers on political economy to de note the difference between the value of ad vances and the value of returns made by their employment.
The profit of the farmer and the manu facturer is the gain made by the sale of produce or manufactures, after deducting the value of the labor, materials, rents, and all expenses, together with the interest of the capital employed,—whether land, buildings, machinery, instruments, or money. The rents and profits of an estate, the income or the net income of it, are all equivalent ex pressions. The income or the net income of an estate means only the profit it will yield after deducting the charges of management; Andrews v. Boyd, 5 Greenl. (Me.) 202; Earl v. Rowe, 35 Me. 420, 58 Am. Dec. 714.
Under the term profit is comprehended the produce of the soil, whether it arise above or below the surface; as, herbage, wood, turf, coals, minerals, stones: Moen v. Bart
lett, 41 W. Va. 559, 23 S. E. 666, 31 L. R. A. 128, 56 Am. St. Rep. 884; also fish in a pond or running water. Profits are divided into profits d prendre, or those taken and enjoyed by the mere act of the proprietor himself, and profits d rendre, namely, such as are re ceived at the hands of and rendered by S*' other. Hamm. N. P. 172.
Profits are divided by writers on political economy into and net,—gross profits being the w' n' P difference between the value of advances and the value of returns made by their employment, and net profits being so much of that difference as is attributable solely to the capital employed. The remain der of the difference, or, in other words, the gross profits minus the net profits, has no particular name, but it represents the profits attributable to industry skill and enterprise: See Maltbus, Political Econ.; M'Culloch, Pti litical Econ. 563. But the word fit is -gee erally used in a less extensive- ification, and presupposes an excess of c of returns over the value of advances.
Using profit in this more limited and pop ular sense, persons v.he share profits do not necessarily share losses; for they ma: stipulate fefi a division of gain, if any and yet some on% or more ofethem may, by agrefe-• • meet, be entitled to be indemnified aainst losses by the others : so that whilst; share profits, scale only bear loss's. Per ne‘ who share Dross returns shams profits in he sense of gain; but they do not by sharinf; the re turns losses, for these fall entirely on , those making the advances:'` ,lhiireover, al though a division of gross retUrns is a divi sion of profits ii there are any, it is so only ineidentLlly, and because such profits are in cluded in what is divided : it is not a divi sion of profits as such; and under an agree ment for a division of gross returns, wba, . ever is returned must be divided, whether there be profit or loss, or neither; 1 Lindl. Part. 8, 17. These_considerations hare led to the between agreements to share profits and agreements to share gross returns, and to the doctrine that, whilst an agreement to share profits creates a partner ship, an agreement to share gross returns does not. See PARTNERSHIP.