Net Profit

What it measures

The dollars left over after covering the cost of what you sold and all your operating expenses. This is your actual bottom line.

Net Profit = Income − COGS − Expenses

Why it matters

This number tells you whether your operation is able to sustain itself. It does not necessarily mean that you’ve put cash in the bank. It does not take into account any loans the business is paying or distributions made to the owner.

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Want help putting this number to work in your business? That’s exactly the kind of thing we set up together in coaching.

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