(i) Gross Profit: Gross Profit is the surplus which accrues to a firm when it subtracts its Total Expenditure from its Total Revenue.
Gross Profit = Total Revenue - Total cost. Here cost implies explicit costs only (Normally economic cost, social cost and environmental cost are not considered by the Accountants in India).
(ii) Net Profit or Pure Profit or Economic Profit or True Profit: Net or pure or economic or true profit is the residual left with entrepreneur after deducting from Gross profit the remuneration for the self-owned factors of production, which are called implicit cost.
Net Profit = Gross Profit - Implicit costs.
(iii) Normal Profit: It refers to the minimum expected return to stay in business.
(iv) Super Normal Profit: Super normal profits are over and above the normal profit.
Super Normal Profit = Actual profit - Normal profit.

Residual Claimant Theory of Wages was propounded by the American economist F.A.Walkar in 1875, in his book Political Economy.
According to this theory, wage is the residual portion after paying the remuneration of all the other three factors, namely, land, capital and organisation.
Criticisms:
(i) This theory does not explain the role of trade unions can secure higher wage for workers.
(ii) Demand side of labour in the determination of wages needs to be considered.

i) Monopoly Profit:
Profit earned by the firm because of its monopoly control.
ii) Windfall Profit:
Sometimes profit arises due to changes in price level. Profit is due to unforeseen factors.
iii) Profit as Functional Reward:
 Just like rent, wage and interest profit is earned by the entrepreneur for its entrepreneurial function.

(i) According to Hawley profit is the reward for risk taking in business.
(ii) Every business involves some risks. Since the entrepreneur undertakes the risks, he receives profit.
(iii) If the entrepreneur does not receive the reward, he will not be prepared to undertake the risks
(iv) Thus higher the risks, the greater are the profit.
(v) Every entrepreneur produces goods in anticipation of demand.
(vi) If his anticipation of demand is correct, then there will be profit.
(vii) It is the profit that induces the entrepreneur to undertake such risks.

(i) According to Schumpeter profit is the reward for innovation.
(ii) Innovation means invention put into commercial practice.
(iii) Innovation may consist of introduction of a new product or a new method of production or opening a new market or discovery of new raw materials or reorganisation of an industry.
(iv) The cost of production decreases and so profit increases.
(v) Innovation should be done continuously.