Net income
Financial Accounting glossary · The Accounting Cycle & Financial Statements
Definition
Bottom-line profit measure: revenues minus expenses, plus gains minus losses.
Net income in plain English
Net income is the single most famous number in accounting: the actual profit left over after everything is counted. You take all the money the business earned, subtract all its costs, then add any lucky one-time gains and subtract any one-time losses — and whatever remains is net income, which is exactly why people call it 'the bottom line.' It's like your paycheck after taxes and every bill is paid: what's genuinely yours to keep.
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Practice Net income
Net income is $100 and dividends are $30. How much does retained earnings increase?
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