Net Profit

Net profit means the money left after all costs, expenses, interest, and taxes are subtracted from revenue. In simple terms, net profit is the final profit a company keeps. Net profit is important because it shows the company’s bottom-line profitability. Investors use it to understand whether the business can ultimately turn sales into real earnings. For example, if a company earns $1 million in revenue and all costs and taxes total $850,000, its net profit is $150,000. Net profit is not the same as revenue. Revenue is money coming in from sales, while net profit is what remains after everything is paid.