Net profit is the gross profit (revenue minus COGS) minus operating expenses and all other expenses, such as taxes and interest paid on debt. Although it may appear more complicated, net profit is calculated for us and provided on the income statement as net income.

What is the formula for net profit?

Net Profit = Total Revenue - Total Expenses

Here's an example: An ecommerce company has $350,000 in revenue with a cost of goods sold of $50,000.

What is a net profit in business?

A company's profit is called net income or net profit. ... Net income reflects the total residual income that remains after accounting for all cash flows, both positive and negative. In other words, from revenue, which is called the top-line number, all income, expenses, and costs are deducted to arrive at net income.