Net Income

Net Income is a measure of the profitability of a company.  The goal of a company is to produce profits for the owners.  Net income is a clearly defined statement of profitability for a company.  Specifically, net income is the excess of the price of goods sold or services rendered, minus the costs of goods and services used up during a specified period of time.

Stated another way, the calculation of net income is as follows:

Net Income = Revenues - Expenses

Net income for a company is reported on the Income Statement.