Net Profit

Bottom Line
An essential figure representing net profit after tax, utilized in financial performance metrics such as earnings per share.
Margin
In accounting and finance, 'Margin' can refer to several different concepts ranging from profit margin in sales to the difference in buy/sell prices by market makers.
Net
Net denotes an amount remaining after specific deductions have been made. Net profit before taxation, for instance, is the profit made by an organization after the deduction of all business expenditure but before the deduction of the taxation charge.
Net Income
Net income, also known as net earnings or net profit, is the sum remaining after all expenses have been fulfilled. It serves as a crucial metric that indicates a company's profitability.
Net Margin
Net margin—the percentage of revenue that remains as net income after all expenses have been deducted—serves as a key indicator of a company's overall profitability and financial health.
Net Profit (Net Margin, Net Profit Margin)
Net profit, also known as net margin or net profit margin, represents the amount of revenue that remains after all the expenses of an organization have been subtracted from its total sales. It is a crucial measure of a company's financial performance and profitability.
Profit and Loss Account (P&L Account)
A Profit and Loss Account is a financial statement that summarizes the revenues, costs, and expenses incurred during a specific period, leading to a company's net profit or loss.
Profit Margin
Profit margin measures the profitability of a single transaction or set of transactions by calculating the excess of sales revenue over the costs incurred in providing the goods or services sold. It is also a measure of the surplus of net assets over a period, taking into account capital injections or withdrawals by proprietors.
Profitability Ratios
Financial metrics used to measure a company's ability to generate profit relative to other key variables, such as sales, assets, or equity.
Quality of Earnings
The degree to which the net profit of an organization reflects accurately its operating performance; it is particularly important to ensure that creative accounting has not taken place and that no events have occurred to distort the profit figure.
Retained Earnings
Retained Earnings, also known as retained profits, ploughed-back profits, or retentions, represent the portion of net profit remaining after distribution to shareholders. This amount is retained within the company for reinvestment purposes.
Self-Employment Income
Self-employment income refers to the earnings generated by individuals who work for themselves rather than being employed by a company or organization. This income is subject to Social Security taxes if the net profit from the trade or business is at least $400 for the year. In some cases, earnings less than $400 might still be considered for Social Security purposes.
Total Comprehensive Income
Total comprehensive income is the sum of net profit shown in the profit and loss account (income statement) along with any other comprehensive income. Under the Financial Reporting Standard Applicable in the UK and Republic of Ireland (Section 5), it should be presented as part of a statement of comprehensive income (statement of total recognized gains and losses).

Accounting Terms Lexicon

Discover comprehensive accounting definitions and practical insights. Empowering students and professionals with clear and concise explanations for a better understanding of financial terms.