Net Income

What is the definition of Net Income?

Net income (or net profit) is calculated by taking revenues and adjusting for the cost of doing business, depreciation, interest, taxes and all other expenses. This number is found on a company's income statement and is an important measure of how profitable the company is over a period of time. If the net amount is a negative amount, it is referred to as a net loss. This number is stated after Minority Interests and exceptional items.

The measure is also used to calculate earnings per share.

Stockopedia explains Net Income...

Often referred to as the bottom line, the net income figure shows what a company has earned (or lost) over a given period of time for its equity shareholders. Investors look at net income closely because it is the source of compensation for shareholders of the company (i.e. dividends).

Net income is not a measure of how much cash a company earned because the income statement includes a lot of non-cash expenses such as depreciation and amortization.

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