What is the formula for total profit?

The formula for total profit, or net profit, is total revenue in a given period minus total costs in a given period. If a business generates $250,000 in total revenue in a quarter, but has $215,000 in total costs, its total profit for the period is $35,000.

On a multiple-step income statement, companies lay out revenue and expenses in three sections. The first section includes total revenue minus costs of goods sold. The next section removes the operating or fixed costs, which leads to operating profit. Then, irregular revenue and expenses are added or subtracted, resulting in the total, or net, profit. If total costs exceed total revenue, there is a net loss for the period.