• July 2019
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Net Income

  1. A company’s total net earnings / profit, that is calculated by adjusting for interest, taxes, depreciation and other expenses against revenues, and reflects a company’s profitability over a period of time. Net income is calculated as total revenue (sales) minus expenses, taxes and other operating costs. This computation is used when businesses need to determine earnings per share.

 

  1. An individual’s gross income minus taxes and other fixed deductions.

 

  1. A company’s “bottom line.”

 

 

EXAMPLE:

Accountant: “Because of your high operational costs this past year, your net income was only $1.”

Executive: “So each of the 100 shares in the company is currently only worth a single penny?”

Accountant: “That’s right.”

Executive: “Can a penny still buy a gumball?”

Accountant: “Nope.”

Executive: “Doh.”