What is the calculation formula of net profit?

The calculation formula of net profit is: net profit = total profit-income tax expense.

The three calculation formulas of profit are: net profit = total profit-income tax expense; Gross profit = main business income-main business cost matching with income; Profit = operating profit+net investment income+net non-operating income and expenditure.

Importance:

After tax profit (net profit) is a very important economic indicator. For investors of enterprises, net profit is the basic factor to get the return on investment, and for managers of enterprises, net profit is the basis for making business decisions. At the same time, net profit is also a basic tool to evaluate the profitability, operating performance and even solvency of enterprises, and it is a comprehensive index to reflect and analyze many aspects of enterprises.

Net profit is the final result of enterprise management. The more net profit, the better the operating efficiency of the enterprise. If the net profit is small, the operating efficiency of the enterprise will be poor, which is the main index to measure the operating efficiency of the enterprise.