|
Net income is equal to the income that a firm has after subtracting costs and expenses from the total revenue. Expenses will typically include tax expense. For a merchandising company, subtracted costs may be the cost of goods sold, sales discounts, and sales returns and allowances. For a product company advertising, manufacturing, and design and development costs are included. Net income is sometimes called the bottom line because it is typically found on the last line of a company's income statement. An equation for net income in merchandising: Net income or Net loss = Revenue - Cost of goods sold - Sales discounts - Sales returns and allowances - Expenses = Profit Another term that is closely related to this is top line. As the Total Revenue forms the first line of the account statement, it is often called top line.
| ||||||||
|
| |||||||||
 |
|
| |