Often referred to as the “bottom line” because it sits at the very end of an income statement, net profit represents the true profitability of a business over a specific period. It is the definitive measure of financial health, calculating what remains of a company’s total revenue after accounting for absolutely all outflows—including the direct cost of goods sold, everyday operating expenses (like rent and payroll), debt interest, and corporate taxes. Unlike gross or operating profit, which only look at specific structural costs, net profit tells investors and business owners exactly how much money is left over to either reinvest back into the company’s growth or distribute to shareholders as dividends.