Mergers & Acquisitions

Resources: Glossary

Don’t be confused or intimidated by any terms or abbreviations in the M&A world. You’ll find answers here.

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 advertising costs.

See Also

EBIT, EBITDA, gross profit, SDE.

Tips

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

Related Resources

EBITDA | Definition, Formula & Example – A Complete Guide

Seller’s Discretionary Earnings (SDE) | Definition & Examples

Should I use SDE or EBITDA to value a business?