Net Profit
Net profit is the money a company retains after covering all expenses, taxes and mandatory payments.
It is calculated using the following formula: revenue − all expenses (cost of goods sold, selling and administrative expenses, interest on loans) − taxes. For example, if revenue is 5 million rubles, expenses amount to 4.2 million rubles, and taxes are 0.2 million rubles, net profit will be 600,000 rubles.
Net profit shows whether a business is actually making money. It is used when planning investments, evaluating projects and assessing unit economics. For business owners and investors, it is the key indicator.