Net Profit

Net Profit (Definition)

Net profit is the amount of money a business earns after accounting for all expenses, taxes and costs.

Key aspects of net profit include:

1. Also known as net income or the bottom line
2. Calculated by subtracting all expenses (including operating costs, taxes, and interest) from total revenue
3. Represents the true profit of a company after all obligations have been met
4. A key indicator of a companys financial health and profitability
5. Used to calculate important financial ratios like net profit margin
6. Can be reinvested in the business or distributed to shareholders as dividends
7. Understanding net profit is crucial for assessing a companys long-term viability and success

Net profit is a fundamental metric for evaluating business performance and making strategic financial decisions.