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Net Profit
Business
WHAT IS IT?
Net profit is the amount left after the business's relevant costs and expenses have been deducted from its revenue.
IN PLAIN ENGLISH
It is the result after the costs included in the calculation have been taken into account.
SIMPLE EXAMPLE
A business might have £50,000 of sales, but its net profit depends on its direct costs, overheads and other relevant expenses.
WHY DOES IT MATTER
Sales alone do not tell you how much money the business has generated as profit.
THE ROCKET TEST
Net profit is what remains after the relevant business costs and expenses are accounted for.
SEE IT IN ACTION
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