Month End Glossary

Net Profit

Net profit is the amount of money that remains from a company's revenue after deducting all expenses, taxes, and costs. It reflects the overall profitability of the business and is also known as the bottom line as it's reported as the last line of the income statement.

Net profit represents a company's profitability after all operating and non-operating expenses, taxes, interest, and other deductions have been accounted for. It shows how much of the revenue generated during a specific period is retained as actual profit. This figure is vital for businesses as it demonstrates their ability to generate profit from their operations as well as from other activities such as investments or financing decisions.\n\nFor instance, if a company reports a revenue of $100,000 and incurs $70,000 in expenses, its net profit would be $30,000. The net profit is commonly referred to as the bottom line because it appears at the end of the income statement. Businesses aim to maximize their net profit to ensure sustainability, growth, and shareholder satisfaction.

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