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'''Net income''' is equal to the [[income]] that a firm has after subtracting costs and [[expense]]s 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:
:<blockquote>Net income or Net loss = Revenue - Cost of goods sold - Sales discounts - Sales returns and allowances - Expenses = Profit</blockquote>
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.
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:
:<blockquote>Net income or Net loss = Revenue - Cost of goods sold - Sales discounts - Sales returns and allowances - Expenses = Profit</blockquote>
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.