A Step-by-Step Guide to Calculating Net Income
This financial statement outlines the company’s revenues and expenses. In other words, the money earned from sales of goods or services and how much it took the company to earn this money. The purpose of the income statement is to analyze a company’s operation and the ability to make a profit. Net income, also known as net profit or net earnings, is the amount of revenue a business has earned during a specific time period after all the expenses have been subtracted. Operating net income formula: an example When Net Income is ample, it offers the flexibility to reinvest in core operations, explore new markets, innovate with product development, or reward shareholders through dividends. As a business, you’re constantly evaluating your cash flow – Are expenditures carefully controlled, or is…