{"id":3250,"date":"2018-01-05T10:10:29","date_gmt":"2018-01-05T15:10:29","guid":{"rendered":"https:\/\/sagestaging.wpengine.com\/en-us\/blog\/?post_type=sage_glossary&#038;p=1673"},"modified":"2025-01-30T09:14:49","modified_gmt":"2025-01-30T14:14:49","slug":"what-is-net-profit","status":"publish","type":"sage_glossary","link":"https:\/\/www.sage.com\/en-us\/blog\/glossary\/what-is-net-profit\/","title":{"rendered":"What is net profit?"},"content":{"rendered":"<header class=\"entry-header has-dark-background-color entry-header--has-illustration entry-header--has-illustration--generic\">\n\t<div class=\"container\">\n\t\t<div class=\"entry-header__row row align-center\">\n\t\t\t<div class=\"col col-lg-7 col-xlg-6 entry-header__content\">\n\t\t\t\t\t\t\t<div class=\"component component-single-header\">\n\t\t\t\t\t\t\t\t\t\t<div class=\"entry-header__misc text--subtitle text--uppercase text--small\">\n\t\t\t\t\t\t\t<a href=\"https:\/\/www.sage.com\/en-us\/blog\/glossary\/\" class=\"entry-header__link\">Glossary definition<\/a>\t\t\t\t\t\t<\/div>\n\t\t\t\t\n\t\t\t\t<div class=\"entry-title-wrapper\">\n\t\t\t\t\t<h1 class=\"entry-title\">\n\t\t\t\t\t\tWhat is net profit?\t\t\t\t\t<\/h1>\n\t\t\t\t<\/div>\n\n\t\t\t\t\n\t\t\t\t\n\t\t\t\t\n\t\t\t<\/div>\n\n\t\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t<\/div>\n\t\t<div class=\"single-post-details container\">\n\t\t<div class=\"col\">\n\t\t\t<span class=\"reading-time\"> min read<\/span>\n\t\t<button\n\t\t\ttype=\"button\"\n\t\t\tclass=\"social-share-button button button--icon button--secondary js-social-share-button\"\n\t\t\tdata-share-title=\"What is net profit?\"\n\t\t\tdata-share-url=\"https:\/\/www.sage.com\/en-us\/blog\/glossary\/what-is-net-profit\/\"\n\t\t\tdata-share-text=\"Please read this interesting article\"\n\t\t>\n\t\t\t<span class=\"social-share-button__share-label\">Share<\/span>\n\t\t\t<span class=\"social-share-button__copy-label\" hidden>Copy Link<\/span>\n\t\t\t<span class=\"social-share-button__copy-tooltip\" aria-hidden=\"true\" hidden>Copied<\/span>\n\t\t<\/button>\n\n\t\t\t\t<\/div>\n\t<\/div>\n\t<\/header>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"h-what-is-net-profit\">What is net profit?<\/h2>\n\n\n\n<p class=\"wp-block-paragraph\">Synonymous with net income, net profit is a company\u2019s total earnings after subtracting all expenses. <\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Expenses subtracted include the costs of normal business operation as well as <a href=\"https:\/\/www.sage.com\/en-us\/blog\/glossary\/what-is-depreciation\/\" target=\"_blank\" rel=\"noopener noreferrer\">depreciation<\/a> and taxes. <\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Net profit is commonly referred to as a company\u2019s \u201cbottom line\u201d and is a true indicator of a company\u2019s profitability.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">While the basic net profit definition does not vary in content from that of net income, there is some variance in usage between organizations. <\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Since the general term \u201cprofit\u201d is calculated at different stages in a company\u2019s <a href=\"https:\/\/www.sage.com\/en-us\/blog\/how-to-make-more-money-with-big-data-and-predictive-analytics\/\" target=\"_blank\" rel=\"noopener noreferrer\">financial reporting<\/a> with varying qualifiers, \u201cnet profit\u201d may appear on a financial statement in the context of \u201cnet profit after taxes\u201d to differentiate between items accounting for and excluding taxes while keeping terms consistent.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">A modern <a href=\"https:\/\/www.sage.com\/en-us\/accounting-software\/\" target=\"_blank\" rel=\"noreferrer noopener\">accounting system<\/a> can be set up to calculate complex net profit reporting structures.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">A more simplistic calculation is as below:<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Net Profit = Total Revenue \u2013 (Total Expenses + Taxes + Depreciation)<\/p>\n\n<section class=\"more-topics alignfull has-grey-light-background-color wp-block-sage-post-topics\">\n\t<div class=\"container\">\n\t\t<div class=\"row\">\n\t\t\t<div class=\"col col-12 col-lg-4\">\n\t\t\t\t<h3 class=\"more-topics__title h2\">Browse more topics from this term<\/h3>\n\t\t\t<\/div>\n\t\t\t<div class=\"col col-12 col-lg-8\">\n\t\t\t\t<ul class=\"post-tags__list\">\n\t\t\t\t\t\t\t\t\t\t\t<li class=\"post-tags__item\">\n\t\t\t\t\t\t\t<a href=\"https:\/\/www.sage.com\/en-us\/blog\/hub\/accounting-101\/\" class=\"post-tags__link button button--secondary\">\n\t\t\t\t\t\t\t\tAccounting 101\t\t\t\t\t\t\t<\/a>\n\t\t\t\t\t\t<\/li>\n\t\t\t\t\t\t\t\t\t\t\t<li class=\"post-tags__item\">\n\t\t\t\t\t\t\t<a href=\"https:\/\/www.sage.com\/en-us\/blog\/hub\/cfo-3-0\/\" class=\"post-tags__link button button--secondary\">\n\t\t\t\t\t\t\t\tCFO 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datetime=\"2026-07-30T09:59:29-04:00\">July 30, 2026<\/time><\/span><\/span>\n\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t<span class=\"card-post__meta-text\"><span class=\"reading-time\">18 min read<\/span><\/span>\n\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t<\/div>\n\t\t\n\t\t<p class=\"card-post__title h5\">\n\t\t\tIncome statement template: Free Excel download and examples\t\t<\/p>\n\n\t\t\t<\/a>\n\t\n\t\n\t\t\n\t\n\t<\/article>\n\t\t\t\t\t<\/div>\n\t\t\t\t\t\t\t<\/div>\n\t\t\t<\/div>\n<\/section>\n<\/div>\n","protected":false},"excerpt":{"rendered":"<p>What is net profit? Synonymous with net income, net profit is a company\u2019s total earnings after subtracting all expenses. Expenses subtracted include the costs of normal business operation as well as depreciation and taxes. Net profit is commonly referred to as a company\u2019s \u201cbottom line\u201d and is a true indicator of a company\u2019s profitability. While [&hellip;]<\/p>\n","protected":false},"author":102,"featured_media":0,"template":"","meta":{"_sage_video":false,"footnotes":""},"tags":[110,396],"class_list":["post-3250","sage_glossary","type-sage_glossary","status-publish","hentry","tag-accounting-101","tag-cfo-3-0"],"distributor_meta":false,"distributor_terms":false,"distributor_media":false,"distributor_original_site_name":"Sage Advice US","distributor_original_site_url":"https:\/\/www.sage.com\/en-us\/blog","push-errors":false,"_links":{"self":[{"href":"https:\/\/www.sage.com\/en-us\/blog\/api\/wp\/v2\/sage_glossary\/3250","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.sage.com\/en-us\/blog\/api\/wp\/v2\/sage_glossary"}],"about":[{"href":"https:\/\/www.sage.com\/en-us\/blog\/api\/wp\/v2\/types\/sage_glossary"}],"author":[{"embeddable":true,"href":"https:\/\/www.sage.com\/en-us\/blog\/api\/wp\/v2\/users\/102"}],"version-history":[{"count":0,"href":"https:\/\/www.sage.com\/en-us\/blog\/api\/wp\/v2\/sage_glossary\/3250\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.sage.com\/en-us\/blog\/api\/wp\/v2\/media?parent=3250"}],"wp:term":[{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.sage.com\/en-us\/blog\/api\/wp\/v2\/tags?post=3250"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}