Describe the term Net Profit

Question

Briefly describe the term Net Profit?

Answer 1

Net Profit , as well named as operating profit is authentic earnings of the company in a given period of time. It is a measure of the profitability subsequent to accounting for all costs. In easy words, net profit is the money left over subsequent to paying all the expenses including interest and taxes. It is the evaluated by deducting all total expenses from total revenues. Net income can be either distributed between shareholders of the company or held through the firm as retained earnings for the prospect purposes.

Net Profit = Gross Profit – Total Operating Expenses – Taxes – Interest