Net Profit(redirected from net profits)
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in capitalist society, the profit left over after income taxes. Net profit, whose amount depends on the amount of gross profit and the magnitude of income taxes, is used by businessmen and monopolies for the expansion of production and for parasitic consumption. By maintaining secrecy in commercial operations, exaggerating the depreciation rate of fixed assets, and using sophisticated methods to falsify accounts, capitalists are able to understate their net profit and thereby pay lower taxes.
The net profit of socialist enterprises is the profit shown on the balance sheet—that is, the amount left over after subtracting payments made to the state from profits: capital charges, fixed (rent) payments, payments from the free profit remainder, and interest payments on loans. Net profit is used to form incentive funds, to augment the circulating capital of enterprises, and to finance certain capital investments.