A net profit is the amount of the total profit of the enterprise for the period minus the income tax, that is, the enterprise's profit after tax. Income tax refers to the enterprise will realize the total profit in accordance with the income tax law stipulates the standard to the state to calculate the tax paid. It is a deduction from the total profit of the enterprise. It is the company's profit retained after paying the required income tax in the total profit, which is also generally known as after-tax profit or net profit. The amount of net profit depends on two factors, one is the gross profit and the other is the income tax expense. The formula for calculating net profit is: Net profit = Gross profit - Income tax expense. Net profit is the final result of an enterprise's operation, net profit is more, the enterprise's operating efficiency is good; net profit is less, the enterprise's operating efficiency is poor.

Two, the enterprise income tax rate are legal, income tax rate, the higher the net profit is less. China now has two kinds of income tax rate, one is the general enterprise income tax rate of 25%, that is, 25% of the total profit to be paid to the state treasury as a tax; the other is the three-funded enterprises and some of the high-tech enterprises to use the preferential tax rate, income tax rate of 15%. When the operating conditions of enterprises are comparable, the operating efficiency of enterprises with lower income tax rates is better.

Three, the net profit growth rate = (net profit of the current year - net profit of the previous year) ÷ net profit of the previous year × 100% = (net profit of the current year ÷ net profit of the previous year - 1) × 100%.

Fourth, the indicator is the ratio of net cash flow from operating activities to net profit. The net profit provided by the income statement is recognized on the accrual basis, the matching principle, the historical cost principle, and the premise of constant currency, which is affected by the accuracy of judgments and estimates, as well as inflation and capital expenditures during a certain accounting period, the speed of inventory turnover, and the existence of commercial credit, so that there is a difference between the net profit and the cash flow, and this difference creates a different level of "net income quality". High cash flow and very low net profit indicates that the business is operating conservatively and failing to capitalize on investment opportunities, and that the business has poor cash flow quality; if the net profit is high and the cash flow from operating activities is very low, the business will face difficulties due to insufficient cash, and in severe cases, this will lead to the bankruptcy of the business, which indicates that the quality of the business's net income is very poor. Net cash flow rate from sales. This indicator is the ratio of net cash flow from operating activities for the period to sales revenue for the period. Calculating and analyzing this indicator measures the ability of a business to generate cash flow from sales revenue. The higher the ratio, the greater the ability of sales revenue to generate cash flow. However, it does not mean that the higher the net sales discount rate, the better, because too high net sales discount rate may be due to the enterprise credit policy, payment terms are too harsh, which will limit the expansion of the enterprise's sales, thus affecting the profitability of the enterprise. Evaluation of the reasonable level of net sales discount rate, should be combined with the average level of the industry in which the enterprise is located, the local business practices and corporate credit policy for comprehensive consideration.