Net profit
What remains after every cost, including tax and interest.
Last reviewed 12 September 2026
Net profit is the bottom line of the P&L. It is an accounting result, not a bank balance — you can be profitable and still unable to pay salaries this Friday.
Pair it with cash flow. Profit tells you whether the business model works; cash tells you whether it survives the month.
Formula
Net profit = Revenue − COGS − Operating expenses − Interest − Tax
Frequently asked
What is net profit?+
What remains after every cost, including tax and interest. Net profit is the bottom line of the P&L. It is an accounting result, not a bank balance — you can be profitable and still unable to pay salaries this Friday. Pair it with cash flow. Profit tells you whether the business model works; cash tells you whether it survives the month.
How do you calculate net profit?+
Net profit = Revenue − COGS − Operating expenses − Interest − Tax
Why does net profit matter for founders?+
Pair it with cash flow. Profit tells you whether the business model works; cash tells you whether it survives the month.
Related terms
EBITDA
Earnings before interest, tax, depreciation, and amortisation.
Gross margin
What is left from revenue after the direct cost of delivering it.
Cash flow
The money that actually moved in and out of your bank account over a period.
P&L (profit and loss)
A statement of revenue, costs, and profit over a period.
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