Net Income

Definition

Amount of money earned after deducting from the gross revenues of a business all expenses, including overhead, employee salaries and benefits, manufacturing costs, inventory costs, distribution costs, and marketing and adverstising costs.

See Also

Earnings, gross profit, SDE, EBIT, EBITDA.

Tips

Net income is normally irrelevant when evaluating a small to mid-sized company. The most commonly used metrics for determining earnings are SDE, EBIT, and EBITDA.