Net Income
Net Income tells an investor how much profit a company kept in a period after every cost, interest charge and tax.
How it is calculated
Reported line item
- Unit
- Currency amount (statement tables show millions)
- Periods
- TTM, Quarterly, Annual
- Source
- Reported by the company; supplied by licensed market-data providers, standardised from its SEC filings
Reading Net Income
How to read it
Net income is the bottom line: what is left of revenue once operating costs, interest, taxes and any one-off gains or losses have been counted. It rises with higher sales, wider margins, lower interest or tax, or a one-off gain, and falls with the reverse or with a write-down. On stockrow it sits in the cash flow section, where it is the figure the cash flow statement starts from, and it is shown for the trailing twelve months, for each quarter and for each fiscal year.
What is typical
The amount depends on the size of the company, so it is more telling as a trend or set against revenue. Mature, stable businesses tend to report steady net income, while cyclical industries swing between large profits and losses, and young growth companies often report losses for years while they invest. Compare its growth with the sector medians rather than comparing totals across companies.
Pitfalls
Net income includes non-cash charges and one-off items, so it can differ sharply from the cash a business produces. A single sale of a division or a large impairment can dominate a period. On stockrow it feeds the projected net income and projected net income growth figures, so an unusual period carries into them.