Net income

RECENT NEWS
Forbes  6 hrs ago  Comment 
Discover Financial Services announced its fourth quarter and full year 2014 earnings on Wednesday, January 21. The company reported a 33% year-over-year decrease in net income to $404 million for the quarter. The decline in net income was partly...
Reuters  7 hrs ago  Comment 
Global stock indexes fell on Tuesday following disappointing earnings results and weaker-than-expected U.S. durable goods orders, while the euro rose for a second day against the dollar.
The Economic Times  7 hrs ago  Comment 
Maruti Suzuki India today reported 17.8% increase in net profit at Rs 802.2 cr for Q3 ended December 31, 2014, driven by robust sales numbers.
Reuters  7 hrs ago  Comment 
U.S. stocks fell in a broad decline on Tuesday, with the Dow seeing outsized losses after several blue chip components' results pointed to weakening conditions, while an unexpected decline in durable goods orders also weighed on sentiment.
MarketWatch  11 hrs ago  Comment 
EasyJet PLC rallied 4.2% in Tuesday's trade after the budget airline lifted its revenue guidance and reported first-quarter sales growth that beat expectations. For the quarter ended Dec. 31, 2014, the company said revenue climbed 3.8%, while the...
Forbes  12 hrs ago  Comment 
Pacific Crest’s Apple analyst, who has been a bear on the stock, believes the company’s results could be higher than what the Street is expecting.
Motley Fool  Jan 27  Comment 
At first glance, TI appeared to demolish earnings expectations in the fourth quarter. Look a little closer, however, and it's really just "steady as she goes."
Wall Street Journal  5 hrs ago  Comment 
Reuters  Jan 27  Comment 
The euro rose and shares slipped in Europe on Tuesday as mixed corporate earnings and concerns over Greece kept investors cautious ahead of a busy week which will include the first policy meeting of the U.S. Federal Reserve this year.




 

Net Income is the total amount of profit a company made over a given period of time

Net Income, (sometimes referred to as "net profit", or simply "earnings") is the amount of profit left over after all expenses, including federal and state taxes, have been subtracted. More specifically, it is equal to total revenue less cost of revenue, less operating expenses, less interest expense and income taxes, less or plus extraordinary items, less or plus other items. More simply, it is gross profit minus total operating expenses, minus interest expenses and taxes, plus any other income.

On a very high level, net income can be thought of as all money coming into the company minus all money spent.

Net income is often referred to as "income attributable to common shareholders" or some similar phrase. Net income represents the final net earnings result of the business on an accounting basis, not necessarily a cash basis. It is one of the most frequently tracked metrics because it is an important indicator of how well a company is doing during a particular period. When people refer to the "bottom line" they are talking about a company's net income as it is the last line on the income statement and the most significant number on the statement - arguably of any statement.

Net income is usually divided by the number of shares outstanding to arrive at earnings per share (EPS), the common barometer heard in nearly all financial reports because it provides an individual value to every share exchanged of a company. Most analysts and investors focus on "diluted" earnings per share, which figures in outstanding employee stock options and other equity grants beyond actual shares outstanding in the share markets.

Net Income also appears as the top line of the cash flow statement and represents the starting figure from which Change in Cash and Cash Equivalents is calculated. That saves me. Thanks for being so senslibe!

Example

  • At the close of its fiscal year, Company XYZ reports revenue of $17 million with a cost of revenue of $7 million (equaling a gross profit of $10 million). Operating expenses total $5 million while the company owes $2.5 million in income taxes and $.5 million in interest expenses. The company also reports other income of $2 million. Thus, XYZ's net income for the fiscal year is $4 million. (17 - 7 - 5 - 2.5 - .5 + 2 = 4)
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