Net profit describes the amount of money left over after subtracting the cost of taxes and goods sold from the total value of all products or services sold during a given accounting period. It is also known as net income. If the net profit is a negative number, it is called net loss. The related term “net margin” refers to describing net profit as a ratio of a company’s total revenues. Net profit contrasts with gross profit. Gross profit simply describes the total value of sales in a given accounting period without adjusting for their costs.
