Vyavsay School
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Net profit

What is left after every cost of the business — stock, rent, wages, interest and tax — has been paid.

Net profit is the bottom line: total sales minus all costs over a period. It is what the business actually earned for its owner, and what a bank or investor looks at to judge whether it can carry a loan.

It is easy to confuse with the money in the bank, but the two differ — cash flow is about when money moves; net profit is about whether, over the period, more came in than went out.

Learn it in a lesson

See also: Gross margin, Cash flow