Net domestic product is depreciation minus gross domestic products (GDP), which serves as a measure for the financial prosperity of a business. The decrease in the net domestic product is considered a positive measure.


Net domestic product (NDP) is a special measure of a nation of that measures economic output. The named measure is reported every quarter along with the disposable income, gross national income, and personal income, and they are one of the most critical metrics for economic growth. An increase in the net domestic product is harmful for the business as it represents economic stagnation, while a decrease indicates financial health.

The formula for the net domestic product is the following:


The NDP is calculated by subtracting depreciation from the gross domestic product. The gross domestic product is the market value of all the goods that have been produced within a country’s border during a specific time period.

The net domestic product gives an understanding of the pace at which capital assets need to be replaced as they degrade. NDP accounts for a product that has been consumed over the year and can appear in the form of housing, vehicle, or machinery deterioration.

The net National product at Factor cost is the net money value of the services that have been produced by the resident or country. It does not include depreciation as it is a net a national income.

Net domestic product at market price is the gross domestic product (GDP) minus the consumption of fixed capital (CFC). The NDP is different because it considers a decrease in the value of fixed assets; therefore, it is a better measure of production as it allows to focus on the net rather than gross standards, which corresponds to the Stiglitz-Sen-Fitoussi report. However, the GDP can still be used for pragmatic reasons.