Definition
Net profit (also called net income or 'the bottom line') is gross profit minus all operating costs, interest, and taxes. It is the figure that tells you whether the business actually made money in the period.
On a profit and loss statement, net profit is the last row. It can be positive (profit) or negative (loss). It is reported in the same currency as revenue and is usually shown both as an absolute amount and as a percentage of revenue (the net margin).
Why it matters
Net profit is the cleanest single measure of whether the business is working. Revenue can be impressive while net profit is negative; gross margin can be healthy while net profit is wiped out by overhead. The owner who tracks revenue but not net profit is flying blind.
Where this appears in your tools
The Profit Leak Analyzer estimates how operating costs and product mix affect net profit. The Tax Survival Calculator uses net profit (or expected net profit) as the basis for income tax reserves.