What is net income?
Net income represents the total earnings of a business after all expenses, interest, and taxes are deducted from revenue. It is often referred to as the bottom line.
Why is net income important?
Net income shows overall profitability and financial performance. It is a key metric for investors, management, and stakeholders.
How is net income calculated?
Net income equals total revenue minus all operating expenses, interest, and taxes over a specific period.
Where is net income reported?
It appears at the bottom of the income statement and flows into retained earnings on the balance sheet.
What factors affect net income?
Factors include revenue growth, cost control, tax rates, and financing costs.