In the business world, calculating net profit is one of the important things to do to find out how effectively the company is performing. Net profit is a number that shows the amount of net profit obtained after subtracting all expenses from income. Below are several steps you can take to calculate net profit accurately.

## 1. Calculating Total Income

**Total income** is the amount of money earned from the sale of a company's products or services. To calculate total revenue, you need to add up all the revenue earned from sales in a specified time period.

## 2. Calculate Total Expenses

**Total expenditure** is the amount of money a company spends on operations, production, and other costs. These expenses can include employee salaries, raw materials, rent, and so on. You need to record and add up all of these expenses.

## 3. Calculating Gross Profit

**Gross profit** is the difference between total revenue and production or sales costs. The formula for calculating gross profit is: Gross Profit = Total Revenue – Production Costs. By knowing gross profit, you can see how efficient the company is in generating profits before considering operational costs and taxes.

## 4. Calculating Net Profit

**Net profit (net income)** is the profit a company makes after subtracting all operating costs, taxes and other expenses from total income. The formula for calculating net profit is: Net Profit = Total Income – Production Costs – Operational Costs – Taxes. Net profit is the most important measure in assessing company performance.

## 5. Example of Net Profit Calculation

For example, PT Selamat Sejahtera has a total income of IDR 1,000,000,000 in one year. Production costs incurred by the company are IDR 500,000,000,-, operational costs are IDR 200,000,000,-, and taxes are IDR 50,000,000,-. The following is the calculation of the net profit of PT Selamat Sejahtera:

- Total Income: IDR 1,000,000,000,-
- Production Cost: IDR 500,000,000,-
- Operational Cost: Rp. 200,000,000,-
- Tax: Rp. 50,000,000,-

Calculation steps:

- Gross Profit = Total Revenue – Production Cost = Rp. 500,000,000,-
- Net Profit = Gross Profit – Operational Costs – Tax = IDR 250,000,000

From the example above, it can be seen that the net profit of PT Selamat Sejahtera in one year is IDR 250,000,000,-

## 6. Conclusion

**Calculating net profit** is an important step in evaluating the financial performance of a company. By knowing net profit, you can find out how effective the company is in generating profits. Make sure to always carefully record the company's income and expenses so that net profit calculations can be done accurately.