"Net Income," also known as "Net Earnings" or "Net Profit," is commonly referred to as "the bottom line" in business and finance. This term signifies the final profit a company or individual achieves after all expenses, taxes, and deductions have been subtracted from their total revenue.
It is called "the bottom line" because it is typically the last figure presented on a company's income statement, also known as a Profit & Loss (P&L) statement. This figure is a crucial indicator of a company's financial health and overall profitability, showing whether the entity is operating at a profit or a loss.
The calculation for net income involves subtracting all costs, such as the cost of goods sold, operating expenses, interest, and taxes, from the total revenue.
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