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Net Profit

Net profit, also known as net income or the bottom line, is the amount of income that remains after all expenses, taxes, and costs have been deducted from total revenue. It represents the profitability of a company after accounting for all expenses and is a key indicator of a company's financial health. A positive net profit indicates profitability, while a negative net profit (net loss) means the company is losing money.

Example

A company generates $500,000 in revenue and incurs $400,000 in expenses, leaving a net profit of $100,000 for the period.

Key points

• The amount of income left after all expenses, taxes, and costs have been deducted from revenue.

• Also known as the bottom line or net income.

• A positive net profit indicates profitability, while a negative one signals a loss.

Quick Answers to Curious Questions

Net profit is the amount of income remaining after all expenses, taxes, and costs are subtracted from total revenue.

It indicates a company’s overall profitability and financial health.

A negative net profit indicates that a company is losing money during the period.

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