For business, Net Profit is the amount of revenue after deducting the total costs outside the HPP In other words, Net Income measures the amount of profit left in the business after all costs have been paid in a period. Net profit can be saved by the company in a Retained Earnings account or can be distributed to shareholders in the form of dividends.
Sometimes, companies or businesses also use other terms in terms of Net Profit. The term is Profit Before Tax, Profit Before Interest and Tax, or Profit Before Interest, Tax, and Depreciation. In principle, these terms correspond to the context of each sentence. For example, Profit Before Interest and Tax means Net Profit before deducting interest and tax costs, and so on. The difference in terms is commonly used by management or investors in weighing business decisions through various calculations of financial ratios.
Still referring to the example of the previous Profit and Loss report, then PT Agus’ Net Profit is IDR 25,000,000 (Gross Profit – (Administration Fee + Sales or Marketing Fee + Taxes)).