Glossary

Net income, also known as net profit or the bottom line, is a measure of a company's profitability.

It is calculated by subtracting all expenses, including cost of goods sold, operating expenses, interest, taxes, and other costs, from the total revenue generated by the company. Net income is an important financial metric that investors and analysts use to evaluate a company's performance and assess its financial health. 💼💰

For example, if a company has a total revenue of $1 million, and its expenses amount to $800,000, the net income would be $200,000 ($1,000,000 - $800,000).

Fun fact: Companies with negative net income are said to be operating at a loss, which can be a red flag for potential investors. However, some companies may operate at a loss temporarily, particularly during their early stages or when making significant investments for future growth. 🚩📉