Net Income
2 July 2021
Net income (also referred to as net profits or net earnings) measures how much money a company has earned from doing business over a given period of time (usually a year).
Net profit shows what is left from the money a company has earned (revenue) after substracting all expenses.
In accounting terms it is often referred to as the “botton line” (because it is reported at the bottom of an income statement).
Net Income = Total Income – Total Expenses (including operating expenses, financing costs and taxes)
This indicator is included in the book: Key Performance Indicators – the 75+ measures every manager needs to know, which contains an in-depth description of this KPI, as well as practical advice on data collection, calculations, target setting, and actual usage.
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