Net income

For personal income net of taxes, see disposable income.

"Bottom line" redirects here. For other uses, see Bottom line (disambiguation).

Accountancy
Key concepts
Accountant · Accounting period · Bookkeeping · Cash and accrual basis · Cash flow management · Chart of accounts · Journal  · Special journals · Constant Item Purchasing Power Accounting · Cost of goods sold · Credit terms · Debits and credits · Double-entry system · Mark-to-market accounting · FIFO & LIFO · GAAP / IFRS · General ledger · Goodwill · Historical cost · Matching principle · Revenue recognition · Trial balance
Fields of accounting
Cost · Financial · Forensic · Fund · Management · Tax
Financial statements
Statement of financial position · Statement of cash flows · Statement of changes in equity · Statement of comprehensive income · Notes · MD&A · XBRL
Auditing
Auditor's report · Financial audit · GAAS / ISA · Internal audit · Sarbanes–Oxley Act
Accounting qualifications
CA · CPA · CCA · CGA · CMA · CAT · CFA  · CIIA  · ACCA  · CIA  · CTP · ICAEW · CIMA  · IPA  · ICAN
This box: view · talk · edit

Net income is the residual income of a firm after adding total revenue and gains and subtracting all expenses and losses for the reporting period. Net income can be distributed among holders of common stock as a dividend or held by the firm as an addition to retained earnings. As profit and earnings are used synonymously for income (also depending on UK and US usage), net earnings and net profit are commonly found as synonyms for net income. Often, the term income is substituted for net income, yet this is not preferred due to the possible ambiguity. Net income is informally called the bottom line because it is typically found on the last line of a company's income statement (a related term is top line, meaning revenue, which forms the first line of the account statement).

The items deducted will typically include tax expense, financing expense (interest expense), and minority interest. Likewise, preferred stock dividends will be subtracted too, though they are not an expense. For a merchandising company, subtracted costs may be the cost of goods sold, sales discounts, and sales returns and allowances. For a product company advertising, manufacturing, and design and development costs are included.

An equation for net income

Net sales (revenue)

– Cost of goods sold

= Gross profit

– SG&A expenses (combined costs of operating the company)

= EBITDA

– Depreciation & amortization

= EBIT

– Interest expense (cost of borrowing money)

= EBT

– Tax expense

= Net income (EAT)

See also

Dividend Economic value added Gross income Income statement Liquidating dividend

Net income per employee Operating income Operating Income Before Depreciation and Amortization Opportunity cost Profit (accounting)

This accountancy-related article is a stub. You can help Wikipedia by expanding it.v · Categories: Generally Accepted Accounting Principles Income Accounting stubs Wikimedia Foundation. 2010. Игры ⚽ Поможем написать курсовую Nether Compton Fino Look at other dictionaries: net income — n: the balance of gross income remaining after all allowable deductions and exemptions are taken Merriam Webster’s Dictionary of Law. Merriam Webster. 1996. net income …   Law dictionary Net Income - NI — 1. A company s total earnings (or profit). Net income is calculated by taking revenues and adjusting for the cost of doing business, depreciation, interest, taxes and other expenses. This number is found on a company s income statement and is an… …   Investment dictionary Net income — The company s total earnings, reflecting revenues adjusted for costs of doing business, depreciation, interest, taxes and other expenses. The New York Times Financial Glossary * * * net income net income ➔ income * * * net income UK US noun [U]… …   Financial and business terms net income — The company s total earnings, reflecting revenues adjusted for costs of doing business, depreciation, interest, taxes and other expenses. Bloomberg Financial Dictionary * * * net income net income ➔ income * * * net income UK US noun [U]… …   Financial and business terms Net income per employee — (NIPE) or Revenue per employee is a company s net income divided by the number of employees. In general, the higher the number, the more efficient the company uses its employees, however the numbers are only directly comparable when comparing… …   Wikipedia net income — /net ɪnkʌm/ noun a person’s income which is left after taking away tax and other deductions …   Dictionary of banking and finance net income — Income by way of earnings, interest, or rent after the payment of taxes, insurance, expenses of maintenance and repairs, etc. Anno: 128 ALR 234. See taxable income …   Ballentine's law dictionary Net income attributable — The Net Income Attributable, or NIA for short, is a concept in the Internal Revenue Code for calculating the net gain or loss generated by an excess IRA contribution or the net gain or loss for the purposes of a Roth IRA conversion or… …   Wikipedia Net Income After Taxes - NIAT — An accounting term, most often found in a company s annual report, that is meant to show the company s definitive bottom line for the accounting period. In other words, it shows what the company earned after all its expenses, charge offs,… …   Investment dictionary net income, proceeds, and profits — For most purposes, nothing more nor less than net income. Dumaine v Dumaine, 301 Mass 214, 16 NE2d 625, 118 ALR 834 …   Ballentine's law dictionary 18+ © Academic, 2000-2024 Contact us: Technical Support, Advertising Dictionaries export, created on PHP, Joomla, Drupal, WordPress, MODx. Mark and share Search through all dictionaries Translate… Search Internet Share the article and excerpts Direct link … Do a right-click on the link above and select “Copy Link”