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LSDefine
Simple English definitions for legal terms
net profit
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A quick definition of net profit:
Net profit is the money a business makes after subtracting all the costs of running the business. This includes the cost of making or buying the products, paying employees, and other expenses. It's the money left over that the business can keep or use to invest in the future. Net profit is important because it shows how well a business is doing financially.
A more thorough explanation:
Definition: Net profit is the amount of money a business earns after deducting all expenses from its total revenue. It is also known as net income or bottom line.
Example: If a company's total revenue is $100,000 and its expenses are $80,000, then its net profit is $20,000.
This means that the company has earned $20,000 in profit after paying for all its expenses such as salaries, rent, utilities, and taxes. Net profit is an important measure of a company's financial health as it shows how much money it is actually making.