Question

What is Net Profit?

Hint:

Gross Profit = before expenses. Net Profit = after all expenses.

Answer 1

Step 1: Definition.
Net Profit is the profit remaining with a business after deducting all operating expenses, interest, depreciation, and taxes from the total revenue.
Step 2: Formula.
\[ \text{Net Profit} = \text{Total Revenue} - \text{(Operating Expenses + Interest + Taxes + Depreciation)} \] Step 3: Importance.
Net Profit shows the actual profitability and financial health of a business. It is also known as “bottom line profit.”
Step 4: Conclusion.
Thus, Net Profit is the surplus income left with the business after meeting all expenses and liabilities.