bottom line

bottom line

In business, net income (net earnings, net profit, and informally, bottom line) is an entity’s income minus cost of goods sold, expenses and taxes for an accounting period. It is computed as the residual of all revenues and gains over all expenses and losses for the period, and has also been defined as the net increase in shareholders’ equity that results from a company’s operations. In the context of the presentation of financial statements, the IFRS Foundation defines net income as synonymous with profit and loss. Net income is a distinct accounting concept from profit. Net income can also be calculated by adding a company’s operating income to non-operating income and then subtracting off taxes.

Vocabulary

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