2 min read
Definition
Net profit is what remains after every cost — cost of sales, overheads, interest and tax — has been deducted from revenue. It is the true bottom line belonging to the company.
In plain terms
It is the final figure: the profit the business genuinely made once absolutely everything is paid. A company can have strong sales and gross profit yet a thin or negative net profit if overheads, interest or tax eat it up.
Why it matters for your company
Net profit shows whether the whole enterprise makes money, and it feeds reserves and dividend capacity. A healthy gross profit but weak net profit points to bloated overheads or heavy borrowing — signals a lender reads.
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