What is net profit?

Net profit (definition)

Net profit is the total amount of profit your business makes after deducting expenses.

This includes:

  • the cost of goods sold

  • overheads

  • tax

Net profit is a good way of measuring how profitable your business is. Annual net profit is your net profit for one year.

Net profit is also called net earnings and net income. Because it’s on the last line of an income statement, it’s also known as ‘the bottom line.’

See other terms

Net profit margin

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