Net profit
The result that income from sales is more than all expenditures. Also called profit after tax [Bateman, McAdam, p.138].
The amount of money earned after all expenses, including overhead, employee salaries, manufacturing, and advertising, has been deducted from the total revenue [Friedman, p.471].
Net profit is the amount your business earns after deducting all operating, interest, and tax expenses over time. You need to know a company’s gross profit to arrive at this value. Net profit is another critical parameter that determines the financial health of your business. It shows whether the business can make more than what it spends. You can use your net profit to help you decide when and how to work towards expanding your business and when to reduce your expenses. Net profit tells you about the profitability of your business. Knowing about the same has several advantages beneficial for the business. Most government forms and tax forms require you to declare your net profit. Based on your net profit, financial institutions, like banks, decide whether to issue a loan or not [Zoho].
Bateman, H., McAdam, K. (2003). Dictionary of Economics. London: A & C Black Publishers Ltd.
Friedman, Jack P. (2012). Dictionary of Business and Economics Terms (Barron's Business Dictionaries) (5 ed.). New York: Barron’s Educational Series.
Gross Profit vs Net Profit – How are they different. Zoho. Retrieved from: https://www.zoho.com/books/guides/what-is-the-difference-between-gross-and-net-profit.html