Net income

RECENT NEWS
Benzinga  3 hrs ago  Comment 
Medtronic PLC (NYSE: MDT) is estimated to report its quarterly earnings at $1.26 per share on revenue of $7.49 billion. Ascena Retail Group Inc (NASDAQ: ASNA) is projected to post its quarterly earnings at $0.13 per share on revenue of $1.73...
newratings.com  5 hrs ago  Comment 
LONDON (dpa-AFX) - Online trading company IG Group Holdings plc (IGG.L) Tuesday, in its trading update for the fourth quarter, said it now expects full-year earnings to be slightly ahead of expectations, as cost increase was more than offset by...
Motley Fool  12 hrs ago  Comment 
The cybersecurity provider’s earnings disappointed in a number of ways, but one problem rises above the rest, with no end in sight.
The Economic Times  May 30  Comment 
Results declared by most Nifty companies have been either much better or worse than expected, resulting in their stock prices making sharp moves on results day.
The Economic Times  May 30  Comment 
Shares of gold financing company Muthoot Finance today zoomed 9 per cent after it reported a 61 per cent jump in net profit for the quarter ended March, 2016.
New York Times  May 30  Comment 
Numbers also expected this week are from the Commerce Department on consumer spending and income, and from the Labor Department for hiring and unemployment.
Motley Fool  May 28  Comment 
Beyond the headline figures, here are some important metrics investors should be focusing on.




 

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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