Net profit is the amount of money a business earns after all expenses have been deducted from its total revenue. This includes costs such as salaries, rent, utilities, and taxes. It is an important measure of a company's financial health, indicating how much profit is left for reinvestment or distribution to shareholders. Calculating net profit involves subtracting total expenses from total revenue. The formula is: Net Profit = Total Revenue - Total Expenses. A positive net profit means the business is making money, while a negative net profit indicates a loss, which can be a sign of financial trouble.