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Categories: General Tax Terms

Net Income refers to the total profit of a company after all expenses, taxes, and costs have been deducted from total revenue. It is an essential indicator of a company’s financial performance and is often referred to as the "bottom line" on the income statement.

Net income can be calculated using the formula:

Net Income = Total Revenue – Total Expenses

This figure is crucial for evaluating a company’s profitability and is used by stakeholders to assess the company’s financial health, make investment decisions, and determine dividend payouts.

For example, if a company has total revenues of $500,000 and total expenses of $300,000, its net income would be:

Net Income = $500,000 – $300,000 = $200,000

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