Net income is the profit that remains after every cost of running the business has been paid for a given period. Accountants often call it the bottom line because it sits at the end of the income statement. Positive net income means the firm made money after tax; negative net income means it lost money.
Key takeaways
- Net income is revenue minus all expenses, interest and tax.
- It is the figure used to calculate earnings per share.
- One strong quarter of net income does not guarantee future profits.
- Compare net income with cash flow, because profit and cash are not the same thing.