Net Income Financial Statement Definition

What is an income statement.

Net income financial statement definition. An income statement is one of the three along with balance sheet and statement of cash flows major financial statements that reports a company s financial performance over a specific accounting. You can look that the net profit formula a step further by looking at the income statement. It measures excess revenues over total expenses. Net income for a business represents the income remaining after subtracting the following from a company s total revenue.

As you can see the net income equation is quite simple. This way investors creditors and management can see how efficient the company was a producing profit. Net income ni is known as the bottom line as it appears as the last line on the income statement once all expenses interest and taxes have been subtracted from revenues. Calculating ni for.

This is the income that is left over after all the expenses have been paid. Investor creditors and management focus on the net income calculation. Is calculated by deducting income taxes from pre tax income. Also sometimes called a net income statement or a statement of earnings the income statement is one of the three most important financial statements in financial accounting.

Net income net income net income is a key line item not only in the income statement but in all three core financial statements. Refers to a company s financial position when total revenues exceed total expenses in other words net income is the profits of a company. Also called income earnings or net profit. Income after all expenses and taxes have been deducted.

It shows your revenue minus your expenses and losses. Taxes preferred stock dividends but not common stock dividends net income for a business is found on the income statement. Net sales that records in income statement are the net amount that entity expected to receive from the sales of goods or services. Net income is the amount which a company can save to pay off debt or for the investment in the new projects.

While it is arrived at through the income statement the net profit is also used in both the balance sheet and the cash flow statement. This measurement is at the bottom of the income statement because of which many people prefer this as the bottom line. Net income the most frequently viewed figure in a firm s financial statements is used in calculating various profitability and stock performance measures including price earnings ratio return on equity earnings per share and many others.