Net profit before taxes is $42,900 and income taxes for the year are $10,725. What is net profit?

1. Net profit is the bottom line of the income statement, found by subtracting all expenses from revenues. 2. The last step in that sequence is deducting income taxes from net profit before taxes. 3. Net profit before taxes is $42,900. 4. Income taxes are $10,725. 5. Subtract: $42,900 minus $10,725 equals $32,175. 6. Adding tax rather than deducting it gives $53,625, which would reward the firm for owing money. 7. Leaving the figure at $42,900 reports a pre-tax number as though it were the final profit. _Source: OpenStax Introduction to Business (CC BY 4.0), Ch 14 "Using Financial Information and Accounting", section 14.5 The Income Statement_