@wikipediaThe ultimate measure of the Business profitability as per the following formula
Synonyms: Net Income = Net Profit = Bottom Line
Business earnings after deducting the OPEX, Interest and Income Tax from Total Revenue within the Accounting Period:
Net Income = EBT − Income Tax = EBIT - Interest - Income Tax |
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Net Income = Operating Income + Non-Operating Revenue - Non-Operating Expenses - Interest - Income Tax |
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Net Income = Sales - COGS - OPEX + Non-Operating Revenue - Non-Operating Expenses - Interest - Income Tax |
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Net Income = Total Revenue - COGS - OPEX - Non-Operating Expenses - Interest - |
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It is often called Bottom Line because it is shown at the bottom line in P&L.
It is one of the most important measures of the Business profitability
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The terms above are calculated for the same accounting period (usually 12 months).
Only positive Net Income with a positive FCF adds value to the Business.
See also
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Business / Business Administration / Financial Management / Financial Accounting / Profit and Loss (P&L)
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