Investing term

What is Net income?

The bottom line — what's left after everything (costs, OpEx, interest, taxes) is subtracted.

Net income is the bottom line — what's left after every cost is subtracted from revenue: production costs, operating expenses, interest, and taxes. It's the headline "profit" figure and the basis for earnings per share. But it can be shaped by accounting choices and one-off items, which is why savvy investors cross-check it against cash flow.

For example

A company with $10M in revenue ends up with $1.2M of net income after all costs and taxes — the true profit for that period.

Net income is taught hands-on in Stage 14 — Reading Financial Statements.

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Related terms

Accounts receivable (A/R)Money customers owe the company for goods or services already delivered but not yet paid.AccrualsAccounting entries that record revenue or expense before cash actually moves.Annual reportThe yearly disclosure that includes audited financials, MD&A, and footnotes — the primary source for serious investors.Balance sheetThe 'photo' statement — what the company owns, what it owes, and what's left for owners, on a single date.
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