The Net Income KPI refers to the total profit or income a business makes after deducting general expenses, costs and taxes. Net Income is also referred to as Net Profit or Net Earnings as it represent the amount of profit remaining after all expenses and costs, which can be paid off to shareholders, pay debt or invest in new projects.
Net Profit/Net Earnings
In order to calculate the net income, total expenses need to subtracted from the total revenue including taxes and interest payments.
Net Income = [Total Revenue - Total Expenses]
A company wants to find its net income for the first quarter of 2022. Here are the numbers they are working with:
Total revenues: €50.000
Interest expense: €1.000
Expenses = €9.000 + €5.000 + €10.000 + €1.000 = €25.000
Net Income = [€50.000 - €25.000]
Net Income = €25.000