Net Income

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The Hindu Business Line  10 hrs ago  Comment 
The stock markets will be looking to the next earnings season starting in a little over three weeks from now (after the second quarter), for determining its momentum, Anup Bagchi, MD &...
Benzinga  Sep 12  Comment 
Shares of Darden Restaurants (NYSE: DRI) jumped more than 3% in pre-market trading after the company reported better-than-expected fiscal first quarter earnings. The Orlando, Florida-based company reported a quarterly loss of $19.3 million, or...
Jutia Group  Sep 12  Comment 
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SeekingAlpha  Sep 12  Comment 
By The Value Investor: Investors in HD Supply (NASDAQ:HDS) were quite pleased with a solid set of second quarter earnings and an upbeat guidance for the third quarter. Despite real operational momentum, with growth outpacing general market growth...
MarketWatch  Sep 12  Comment 
Shares of Yahoo and Health Care REIT are likely to be active in Friday’s session.
Canada.com  Sep 11  Comment 
Positive corporate earnings and dealmaking in the tech sector helped the Toronto stock market to a solid advance
SeekingAlpha  Sep 11  Comment 
By WhisperNumber: Darden Restaurants (NYSE:DRI) is expected to report earnings on Friday, September 12th. The whisper number is $0.28, four cents short of the analysts' estimate and showing no confidence from the WhisperNumber community. Whispers...
MarketWatch  Sep 11  Comment 
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Wall Street Journal  Sep 11  Comment 
Manchester United spent more than $8 million to pay off David Moyes and his coaching staff, the club said Wednesday.
Clusterstock  Sep 11  Comment 
Professional stock market strategists and analysts get paid to offer earnings forecasts. Indeed, earnings and expectations for earnings are what drive stock prices. History shows that those forecasts almost always start off a little too...




 

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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