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Glossary

Net profit

What’s left after every cost — direct and overhead — is paid.

Net profit is the bottom line: revenue minus all costs, including overheads, wages, tax-deductible expenses and your own pay if you take a wage. A business can have strong gross margins and still make little net profit if overheads are too high.

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Financial reporting Overheads
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Overheads Practical completion Preventative maintenance Prime cost (PC) item
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