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Information about Net Income

"Bottom line" redirects here. For other uses, see Bottom line (disambiguation).
Net income is equal to the income that a firm has after subtracting costs and expenses from the total revenue. Net income can be distributed among holders of common stock as a dividend or held by the firm as retained earnings. Net income is primarily an accounting term used in the US; in other countries (such as the UK) profit is the usual term. Additionally, in the US net income is often (though ambiguously) called just income.

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.

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.)

An equation for net income in merchandising:

Net income or Net loss = Revenue – Cost of goods sold – Sales discounts – Sales returns and allowances – Expenses – Minority interest – Preferred stock dividends

See also

Bottom line may refer to:
  • ESPN sports scores and news (ESPN BottomLine).
  • the bottom line, or net income, the income that a firm has after subtracting costs and expenses from the total revenue
  • Bottom Line (band), a rock band from Cincinnati, Ohio.

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Income, generally defined, is the money that is received as a result of the normal business activities of an individual or a business.

Internationally, the accounting term income is synonymous to term revenue minus expenses.
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In common usage, an expense or expenditure is an outflow of money to another person or group to pay for an item or service, or for a category of costs. For a tenant, rent is an expense. For students or parents, tuition is an expense.
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Revenue is a business term for the amount of money that a company receives from its activities in a given period, mostly from sales of products and/or services to customers.
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Dividends are payments made by a company to its shareholders. When a company earns a profit, that money can be put to two uses: it can either be re-invested in the business (called retained earnings), or it can be paid to the shareholders of the company as a dividend.
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In accounting, retained earnings refers to the portion of net income which is retained by the corporation rather than distributed to its owners. Similarly, if the corporation makes a loss, then that loss is retained. Retained earnings are cumulative from year to year.
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Motto
"Dieu et mon droit" [2]   (French)
"God and my right"
Anthem
"God Save the Queen" [3]
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For the television series, see Profit (TV series)
Profit generally is the making of gain in business activity for the benefit of the owners of the business.
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Tax expense was computed in earlier years by multiplying the income before tax number, as reported to shareholders, by the appropriate tax rate. The computation was made more complex by the range of tax rates applicable to various levels of income.
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Interest expense relates to the cost of borrowing money. It is the price that a lender charges a borrower for the use of the lender's money. Interest expense is different form OPEX and CAPEX, for it relates to the capital structure of a company. Interest expense is usually tax-deductible.
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Minority interest in business is an accounting concept that refers to ownership of a company that is less than 50% of outstanding shares.[1] Minority interest is reported on the consolidated balance sheet of the owning company between liabilities and equity sections to
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Merchandising refers to the methods, practices and operations conducted to promote and sustain certain categories of commercial activity. The term is understood to have different specific meanings depending on the context.
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A company is a form of business organization.

Types

There are various types of company that can be formed in different jurisdictions, but the most common forms of company are:
  • a company limited by shares.

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Advertising is paid, one-way communication through a medium in which the sponsor is identified and the message is controlled by the sponsor. Variations include publicity, public relations, etc..
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Manufacturing (from Latin manu factura, "making by hand") is the use of tools and labor to make things for use or sale. The term may refer to a vast range of human activity, from handicraft to high tech, but is most commonly applied to industrial production, in which raw
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An Income Statement, also called a Profit and Loss Statement (P&L), is a financial statement for companies that indicates how Revenue (money received from the sale of products and services before expenses are taken out, also known as the "top line") is transformed
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An Income Statement, also called a Profit and Loss Statement (P&L), is a financial statement for companies that indicates how Revenue (money received from the sale of products and services before expenses are taken out, also known as the "top line") is transformed
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Revenue is a business term for the amount of money that a company receives from its activities in a given period, mostly from sales of products and/or services to customers.
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In financial and business accounting, earnings before interest and taxes (EBIT) is a measure of a firm's profitability that excludes interest and income tax expenses.[1]

EBIT = Operating Revenue – Operating Expenses + Non-operating Income
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Earnings before interest, taxes, depreciation and amortization (EBITDA) is a non-GAAP metric that can be used to evaluate a company's profitability.
:EBITDA = Operating Revenue – Operating Expenses + Other Revenue

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An Income Statement, also called a Profit and Loss Statement (P&L), is a financial statement for companies that indicates how Revenue (money received from the sale of products and services before expenses are taken out, also known as the "top line") is transformed
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Gross income is commonly defined as the amount of a company's or a person's income before all deductions or any taxpayer’s income, except that which is specifically excluded by the Internal Revenue Code, before taking deductions or taxes into account.
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Dividends are payments made by a company to its shareholders. When a company earns a profit, that money can be put to two uses: it can either be re-invested in the business (called retained earnings), or it can be paid to the shareholders of the company as a dividend.
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