Net Profit, also known as Net Income, is the bottom line figure on an income statement which shows the total amount of money a business has earned after expenses are deducted. It is calculated by taking all revenue generated during the period and subtracting the costs associated with running the business, such as salaries, rent, materials, advertising and any other incurred cost. Net profit is often used as a measure of a company’s financial health because it gives an indication of how much money is available to pay off debts, reinvest in operations or distribute as dividends.