From the Learn Hub
Learn Hub
Net profit definition
The money a business has left after covering all its expenses – including rent, wages, taxes, and utility bills.
What is net profit?
Net profit is the money a business has left after covering all its expenses – not just the cost of making its products, but also things like rent, wages, taxes, and utility bills. It’s often called the ‘bottom line’ because it shows the real profit a company makes once everything is paid for.
How to calculate net profit
Net profit = total revenue – total expenses
For example, if a bakery makes £10,000 in sales, spends £4,000 on ingredients, and another £3,000 on rent, wages, and bills, its net profit is £3,000. A positive net profit means the business is making money, while a negative net profit (also called a net loss) means it’s spending more than it earns.
Investing glossary
It's important you know
Capital at risk. All investing should be for the longer term. The value of your investments can go up and down, and you may get back less than you invest. Tax treatment depends on individual circumstances and may be subject to change in the future.
A 25% government penalty applies if you withdraw money from a Lifetime ISA for any reason other than buying your first home (up to £450,000) or for retirement, and you may get back less than you paid into your Lifetime ISA.
Your home may be repossessed if you do not keep up repayments on your mortgage.
Payments you make into your pension won’t be accessible until the minimum pension age (currently 55, increasing to age 57 from 2028). Tax treatment depends on individual circumstances and may be subject to change in the future.