What does net profit refer to?

Net profit refers to the actual profit that remains after all expenses, including taxes and interest, have been deducted from total revenue. It is a key measure of a company's profitability and is often used to assess financial performance.

The correct understanding of net profit is that it provides a clear picture of what the company retains after covering all costs associated with generating revenue. This includes operating expenses, interest expenses, taxes, and any other costs that may affect the bottom line.

In contrast, the other options describe different financial metrics. Total income before expenses refers to gross income or revenue, while revenue adjusted for inflation pertains to real revenue, which takes purchasing power into account. Profit before taxes focuses solely on earnings prior to tax deductions, which also omits other critical expenses.

Therefore, the distinction of net profit being what's left after interest and taxes are accounted for is what accurately captures the essence of profitability.