Net Income (NI)

**Net income (NI)** is the amount of money a company has left after paying all its expenses and taxes. It is also known as **profit** or **earnings**. Net income is an important measure of a company's financial health, as it shows how much money the company is actually making.

**Calculating net income**

Net income is calculated by subtracting all expenses from revenue. Revenue is the total amount of money a company brings in from its sales. Expenses include costs such as rent, salaries, and marketing.

**The importance of net income**

Net income is important for several reasons. First, it is a measure of a company's profitability. A company with a high net income is more profitable than a company with a low net income. Second, net income is used to calculate a company's earnings per share (EPS). EPS is a measure of a company's profitability per share of stock. Third, net income is used to calculate a company's return on equity (ROE). ROE is a measure of a company's profitability relative to its equity.

**Using net income**

Net income can be used in several ways. Investors use net income to evaluate a company's financial health and to make investment decisions. Creditors use net income to assess a company's ability to repay its debts. Managers use net income to make decisions about how to run their businesses.

**Conclusion**

Net income is an important financial metric that can be used to evaluate a company's financial health. It is calculated by subtracting all expenses from revenue. Net income is used to calculate a company's earnings per share (EPS) and return on equity (ROE). Investors, creditors, and managers all use net income to make decisions about a company.