What is Net Profit?

• A. The profit of the company, after all expenses have been deducted from total revenue
• B. Total revenue before expenses are subtracted
• C. Revenue minus only fixed costs
• D. Profit before tax

Answer: (A)

Net profit is the amount of money a company has left after subtracting every expense from its total revenue. It includes operating costs, interest, taxes, depreciation, and any other costs. This is why the description of profit after all expenses being deducted from total revenue is the correct one—the bottom-line figure that remains after all obligations are met. The other options describe different measures: total revenue before expenses is simply the top line, revenue minus only fixed costs ignores other costs, and profit before tax is calculated before paying taxes, so it isn’t net profit.