Net Income

RECENT NEWS
Wall Street Journal  9 hrs ago  Comment 
Honeywell’s third-quarter earnings rose 18%, driven by sales gains in almost all segments, and the industrial conglomerate raised the lower end of its year outlook.
Wall Street Journal  10 hrs ago  Comment 
Reuters  11 hrs ago  Comment 
U.S. stocks extended their rebound from this month's bruising selloff on Friday, giving the S&P 500 its best day in over a week, as worries about the U.S. earnings outlook eased, but the S&P 500 still posted its fourth straight week of declines.
Wall Street Journal  Oct 16  Comment 
Capital One Financial’s third-quarter earnings fell 2%, although the company reported an increase in domestic card loans.
SeekingAlpha  Oct 16  Comment 
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Clusterstock  Oct 16  Comment 
(Reuters) - Delta Air Lines beat Wall Street analysts' expectations, with a quarterly profit of $1.20 per share, versus an anticipated $1.18.   Overall quarterly profit fell 74 percent to $357 million, partly due to a jump in operating...
SeekingAlpha  Oct 15  Comment 
By WhisperNumber: American Express (NYSE:AXP) is expected to report earnings on Wednesday, October 15th. The whisper number is $1.38, two cents ahead of the analysts' estimate and showing some confidence from the WhisperNumber community. Whispers...
Reuters  Oct 15  Comment 
Investors who have endured a four-month selloff in shares of large U.S. manufacturers will be looking for solid revenue growth and order trends in third-quarter earnings reports starting on Friday to help allay fears that a soft global economy...
SeekingAlpha  Oct 15  Comment 
By CapitalCube: By Sindhu Subramaniam Fastenal Company (NASDAQ:FAST) reports preliminary financial results for the quarter ended September 30, 2014. Fastenal Company just reported its preliminary financial results, based on which we...
New York Times  Oct 14  Comment 
A mistake at a website run by the Nasdaq stock market was to blame for the release of JPMorgan Chase’s third-quarter earnings about three and a half hours early on Tuesday.
SeekingAlpha  Oct 14  Comment 
By WhisperNumber: JPMorgan (NYSE:JPM) is expected to report earnings on Tuesday, October 14th. The whisper number is $1.37, one cent behind the analysts' estimate and showing no confidence from the WhisperNumber community. Whispers range from a...




 

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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