Net Income

Net income means the profit left after all costs, expenses, interest, and taxes are subtracted from revenue. In simple terms, net income is the company’s final profit. Net income is important because it shows how much money a company actually earned after everything is counted. Investors use it to judge profitability and compare companies over time. For example, if a company earns $1 billion in revenue and has $850 million in total costs, expenses, interest, and taxes, its net income is $150 million. Net income is not the same as revenue. Revenue is money coming in from sales, while net income is what remains after all costs and expenses are paid.