In business accounting, net income is profit after all operating costs, interest, and taxes are deducted.
It is often called net profit or the bottom line because it appears near the end of a traditional income statement. The calculation begins with revenue and subtracts expenses such as the cost of goods sold, operating expenses, interest, and income taxes. Depending on the reporting framework, other gains or losses may also affect the final figure.
Net income is different from gross profit, which subtracts only the cost of goods sold, and operating income, which generally excludes financing costs and income taxes. It is also not identical to cash flow: accounting income can include non-cash items and sales that have not yet been collected.
Net income may be retained in the business, distributed to shareholders, or used in per-share calculations. Analysts commonly compare it with revenue to calculate net profit margin.