Net Income On Income Statement

Net income total revenue total expenses.

Net income on income statement. Some people refer to net income as net earnings net profit or the company s bottom line. To calculate the net income you need to know the company s total revenues various costs and income taxes paid. If the revenue is not in the income statement then instead of revenue we can use net income from the gross profit. From this equation management investors and creditors find the ability of the company to producing the profit.

Net income is your company s total profits after deducting all business expenses. For example if the company pays 1 million for the raw materials 2 million to process them and 1 5 million to sell them the total costs equal 4 5 million. Add up all of the company s costs of purchasing producing and selling the goods. It s the amount of money you have left over to pay shareholders invest in new projects or equipment pay off debts or save for future use.

You have no need to subtract the cost of goods sold twice. Net income ni also called net earnings is calculated as sales minus cost of goods sold selling general and administrative expenses operating expenses depreciation interest taxes and.