- published: 17 Feb 2016
- views: 5215
In business, net income (total comprehensive income, net earnings, net profit, informally, bottom line) is an entity's income minus cost of goods sold, expenses and taxes for an accounting period. It is computed as the residual of all revenues and gains over all expenses and losses for the period, and has also been defined as the net increase in shareholders' equity that results from a company's operations. In the context of the presentation of financial statements, the IFRS Foundation defines net income as synonymous with profit and loss.
Net income is a distinct accounting concept from profit. Net income can also be calculated by adding a company's operating income to non-operating income and then subtracting off taxes.
Net income can be distributed among holders of common stock as a dividend or held by the firm as an addition to retained earnings. As profit and earnings are used synonymously for income (also depending on UK and US usage), net earnings and net profit are commonly found as synonyms for net income. Often, the term income is substituted for net income, yet this is not preferred due to the possible ambiguity. Net income is informally called the bottom line because it is typically found on the last line of a company's income statement (a related term is top line, meaning revenue, which forms the first line of the account statement).
An income statement (US English) or profit and loss account (UK English) (also referred to as a profit and loss statement (P&L), statement of profit or loss, revenue statement, statement of financial performance, earnings statement, operating statement, or statement of operations) is one of the financial statements of a company and shows the company’s revenues and expenses during a particular period. It indicates how the revenues (money received from the sale of products and services before expenses are taken out, also known as the “top line”) are transformed into the net income (the result after all revenues and expenses have been accounted for, also known as “net profit” or the “bottom line”). It displays the revenues recognized for a specific period, and the cost and expenses charged against these revenues, including write-offs (e.g., depreciation and amortization of various assets) and taxes. The purpose of the income statement is to show managers and investors whether the company made or lost money during the period being reported.
A cash flow describes a real or virtual movement of money:
Cash flows are narrowly interconnected with the concepts of value, interest rate and liquidity. A cash flow that shall happen on a future day tN can be transformed into a cashflow of the same value in t0.
Cash flow analysis
Cash flows are often transformed into measures that give information e.g. on a company's value and situation:
Net income is a generally accepted accounting principle also known as profit. While net income doesn't paint the entire picture of a company's current financial situation, it is still a useful metric to know before investing in a company. In this video, I explain how to determine net income and how to use it to evaluate a company's financial standing. To sign-up for my Transformational Investing Webinar, visit: http://bit.ly/1KoyuXq Think you have enough money saved for retirement? Learn more: http://bit.ly/1Koytmp Don't forget to subscribe to my channel here: http://ow.ly/RNAnK _____________ For more great Rule #1 content and training: Podcast: http://bit.ly/1U6KrDd Blog: http://bit.ly/1OfhJJ9 Twitter: https://twitter.com/Rule1_Investing Google+: +PhilTownRule1Investing Pinterest: ...
Accounting Principles - How to Determine Net Income or Loss
What is net income, what does it measure, and why is it important to my business? What are the component parts? How is it figured? What other formulas will I need to understand in order to figure net income? How is it different than net margin or net profit? How does it relate to taxes?
Brought to you by StratPad: Simple Business Plan App. Try it free at http://www.stratpad.com This video completes our look at the income statement. You'll learn about EBITDA, what it stands for and how to calculate it. You'll arrive at net income and finish off your income statement. http://www.stratpad.com/income-statement-ebitda-net-income/ Video Transcript Welcome back to the income statement. While you were gone, I just rewrote this and shortened some of the long words: Cost of goods sold has now become COGS and that's how people would pronounce it General and administrative is now G&A; Research and development is now R&D; Sales and marketing is now S&M; It just cleans it up a little bit. You know that this ($7,500) is called gross profit. Gross profit minus the tota...
How to calculate net income after Income Tax, CPP, and EI deductions in British Columbia as of January 1, 2012.
Merchandising accounting income statement (whats included and how to setup) for a merchandising company (a company that sells goods rather than manufacture goods, like retail outlets selling to the public), detailed overview showing the accounting for net income starting with income statement main sections (revenues,COGS (cost of goods sold) & operating expenses), broken down by (1) net sales = (sales - sales discounts - sales returns & allowances), (2) gross profit = ( net sales - COGS) where COGS = (purchases + freight in - purchase discounts - purchase returns & allowances = net purchases) where (beginning inventory - net purchases = goods available for sale - ending inventory = COGS), and (3) operating expenses (sales & marketing, general administrative,R&D;) are subtracted to determin...
Why Do You Care About This? It's a very common interview question! Q: "How does EBIT differ from EBITDA? What about EV / EBIT vs. EV / EBITDA? When do you use which one? How does P / E compare to those?" By http://breakingintowallstreet.com/ "Financial Modeling Training And Career Resources For Aspiring Investment Bankers" And it's very common on the job as well -- you must decide how to value companies and which metrics / multiples to focus on. What are the Differences Between EBIT, EBITDA, and Net Income? These metrics differ in terms of: 1. Who the Money is Available to -- Equity investors, debt investors, and the government? Just equity investors? Someone else? 2. Operating Expenses vs. Capital Expenditures -- Some metrics reflect the impact of both of these, whereas others only...
http://www.DuncanLawOnline.com Gross income and net income are commonly mixed up. Gross income is looking at your total income before taxes, insurance, retirement contributions and any other deductions. Net income, therefore, is your actual take home pay. This distinction is important because it has a big impact on the Means Test when looking at a bankruptcy. Duncan Law, PLLC 628 Green Valley Rd. Suite 304 Greensboro, NC 27408 (336) 856-1234 http://www.DuncanLawOnline.com This video is meant for informational purposes only. Laws vary by jurisdiction so if you have a specific legal question be sure to contact an attorney in your area. This information does not create an attorney-client privilege and, although we don't view it as an advertisement, it may be considered an advertisement for...
In this financial video definition, we explain the definition of Net Income, provide a clear example of the formula, and explain why it's an important concept in business, finance and investing.
This video looks at how to calculate standard deductions (CPP, EI, tax) as well as other deductions (ex. union dues) and net income from gross income.
Net income is a generally accepted accounting principle also known as profit. While net income doesn't paint the entire picture of a company's current financial situation, it is still a useful metric to know before investing in a company. In this video, I explain how to determine net income and how to use it to evaluate a company's financial standing. To sign-up for my Transformational Investing Webinar, visit: http://bit.ly/1KoyuXq Think you have enough money saved for retirement? Learn more: http://bit.ly/1Koytmp Don't forget to subscribe to my channel here: http://ow.ly/RNAnK _____________ For more great Rule #1 content and training: Podcast: http://bit.ly/1U6KrDd Blog: http://bit.ly/1OfhJJ9 Twitter: https://twitter.com/Rule1_Investing Google+: +PhilTownRule1Investing Pinterest: ...
Accounting Principles - How to Determine Net Income or Loss
What is net income, what does it measure, and why is it important to my business? What are the component parts? How is it figured? What other formulas will I need to understand in order to figure net income? How is it different than net margin or net profit? How does it relate to taxes?
Brought to you by StratPad: Simple Business Plan App. Try it free at http://www.stratpad.com This video completes our look at the income statement. You'll learn about EBITDA, what it stands for and how to calculate it. You'll arrive at net income and finish off your income statement. http://www.stratpad.com/income-statement-ebitda-net-income/ Video Transcript Welcome back to the income statement. While you were gone, I just rewrote this and shortened some of the long words: Cost of goods sold has now become COGS and that's how people would pronounce it General and administrative is now G&A; Research and development is now R&D; Sales and marketing is now S&M; It just cleans it up a little bit. You know that this ($7,500) is called gross profit. Gross profit minus the tota...
How to calculate net income after Income Tax, CPP, and EI deductions in British Columbia as of January 1, 2012.
Merchandising accounting income statement (whats included and how to setup) for a merchandising company (a company that sells goods rather than manufacture goods, like retail outlets selling to the public), detailed overview showing the accounting for net income starting with income statement main sections (revenues,COGS (cost of goods sold) & operating expenses), broken down by (1) net sales = (sales - sales discounts - sales returns & allowances), (2) gross profit = ( net sales - COGS) where COGS = (purchases + freight in - purchase discounts - purchase returns & allowances = net purchases) where (beginning inventory - net purchases = goods available for sale - ending inventory = COGS), and (3) operating expenses (sales & marketing, general administrative,R&D;) are subtracted to determin...
Why Do You Care About This? It's a very common interview question! Q: "How does EBIT differ from EBITDA? What about EV / EBIT vs. EV / EBITDA? When do you use which one? How does P / E compare to those?" By http://breakingintowallstreet.com/ "Financial Modeling Training And Career Resources For Aspiring Investment Bankers" And it's very common on the job as well -- you must decide how to value companies and which metrics / multiples to focus on. What are the Differences Between EBIT, EBITDA, and Net Income? These metrics differ in terms of: 1. Who the Money is Available to -- Equity investors, debt investors, and the government? Just equity investors? Someone else? 2. Operating Expenses vs. Capital Expenditures -- Some metrics reflect the impact of both of these, whereas others only...
http://www.DuncanLawOnline.com Gross income and net income are commonly mixed up. Gross income is looking at your total income before taxes, insurance, retirement contributions and any other deductions. Net income, therefore, is your actual take home pay. This distinction is important because it has a big impact on the Means Test when looking at a bankruptcy. Duncan Law, PLLC 628 Green Valley Rd. Suite 304 Greensboro, NC 27408 (336) 856-1234 http://www.DuncanLawOnline.com This video is meant for informational purposes only. Laws vary by jurisdiction so if you have a specific legal question be sure to contact an attorney in your area. This information does not create an attorney-client privilege and, although we don't view it as an advertisement, it may be considered an advertisement for...
In this financial video definition, we explain the definition of Net Income, provide a clear example of the formula, and explain why it's an important concept in business, finance and investing.
This video looks at how to calculate standard deductions (CPP, EI, tax) as well as other deductions (ex. union dues) and net income from gross income.
Subject : Commerce Paper : Financial Management
Universal basic income isn't just an idea anymore: it's a reality. For a number of countries including Finland, Italy, Uganda, Kenya, and soon Canada, some form of UBI, where citizens receive an unconditional monthly income, is being tested. As our automated future appears to inch nearer, proponents argue a UBI would ensure stability for workers, and reduce inequality by alleviating poverty and making resources more widely available. But opponents are quick to argue that citizens will be disincentivized from working if they have a guaranteed income, and that retraining and education will combat automation more constructively. Not to mention the economic impact of paying out large sums to each citizen. Tonight we put these points to the test, debating the motion: The Universal Basic In...
Download Preston's 1 page checklist for finding great stock picks: http://buffettsbooks.com/checklist Preston Pysh is the #1 selling Amazon author of two books on Warren Buffett. The books can be found at the following location: http://www.amazon.com/gp/product/0982967624/ref=as_li_tl?ie=UTF8&camp;=1789&creative;=9325&creativeASIN;=0982967624&linkCode;=as2&tag;=pypull-20&linkId;=EOHYVY7DPUCW3WD4 http://www.amazon.com/gp/product/1939370159/ref=as_li_tl?ie=UTF8&camp;=1789&creative;=9325&creativeASIN;=1939370159&linkCode;=as2&tag;=pypull-20&linkId;=XRE5CA2QJ3I2OWSW In this lesson, students learn the difference between accounting earnings and Warren Buffett's Owner's Earnings. When an Investor looks at the bottom line figure on the Income Statement, they find the Net Income. This is the profit ...
While the Govt shuts down ---- not even going to address that because I think the govt quit working years ago... Same week WSJ announces U.S. household net worth jumped $1.3 trillion in the spring, fueled by gains in home and stock values. The Federal Reserve said Wednesday that net worth rose to $74.8 trillion in the April-June quarter, up 1.8 percent from the first quarter. That is the highest level since records began in 1945, without adjusting for inflation. THE FEDS FIGURES ARE NOT ADJUSTED FOR INFLATION OR POPULATION GROWTH. They then go on to say, Home prices and stock markets have risen further since then, suggesting that Americans' net worth is now even higher. AMERICANS ARE MAKING PROGRESS ---???? Americans also have more equity in their homes. Americans' willingness to b...
Universal basic income isn't just an idea anymore: it's a reality. For a number of countries including Finland, Italy, Uganda, Kenya, and soon Canada, some form of UBI, where citizens receive an unconditional monthly income, is being tested. As our automated future appears to inch nearer, proponents argue a UBI would ensure stability for workers, and reduce inequality by alleviating poverty and making resources more widely available. But opponents are quick to argue that citizens will be disincentivized from working if they have a guaranteed income, and that retraining and education will combat automation more constructively. Not to mention the economic impact of paying out large sums to each citizen. Tonight we put these points to the test, debating the motion: The Universal Basic In...
Download files at: https://people.highline.edu/mgirvin/AllClasses/216_2003/216/busn216.htm Topics Covered in Video: 1. Stylistic Formatting a. Fill Color b. Font Color c. Borders 2. Format Cells Dialog box Number tab a. Number Formatting i. Currency 3. Delete a. For deleting cell content, use Delete key, not Right-click Delete. 4. Formulas with: a. Formula Inputs are in An assumption Table b. Equal Sign c. Relative Cell References d. Absolute Cell References e. * for Multiplying 5. Charts a. Insert Ribbon tab, Charts Group b. Column Chart c. Add Chart Title: Chart Tools Layout Ribbon tab, Labels group, Chart Title button 6. The beauty of Excel: When formula and chart inputs are changed, everything updates in the workbook!!! 7. Page Setup: a. Keyboard = Alt, P, S, P...