Investor Glossary-net incomeInvestor Glossary-net incomeInvestor Glossary-net incomeInvestor Glossary-net incomeInsightful stock market charts - Click here
Categories    # A B C D E F G H I J K L M N O P Q R S T U V W X Y Z

Net Income

The HTML to link to this page

Net income is the revenues of a company minus all expenses incurred in generating those revenues. On the income statement, net income is "the bottom line," the last item after all intermediate measures of income - including gross, operating, and pretax income - are indicated. As an income statement item, net income is always measured for a specific time-span; in the U.S., net income is reported each quarter and for the full year. Net income is more meaningfully expressed on a per-share basis, and net income per share (better known as "earnings per share," or EPS) is perhaps the most important measure of a company's success. Indeed, net income is central to many financial ratios analysts use to value stocks -- most notably, the price-earnings ratio (the P/E), which is the stock price divided by yearly EPS. The main deficiency of net income is that it is measured under generally accepted accounting principles, with their complexities and uncertainties. As such, net income is a somewhat artificial figure that doesn't reveal the actual amount of cash the company generated from operations.

Rate this net income definition...

Learn about investing with the Investor Glossary Term of the Day

Click here for insightful stock market charts. Where is the market headed? The answer may surprise you. Find out
with the exclusive & Barron's recommended charts of Chart of the Day.

Popular Terms: option premium, command economy, retained earnings, deferred revenue, risk management, 401a, dividends payable, 1031 exchange, Zero Cost Collar, annual return, covered put, per diem, 144a, APR, liquidity ratio, FTSE, current ratio, average price per share, reverse mortgage, real GDP, limit order, stock market close, stock split, wholly-owned subsidiary, deferred tax, in escrow, labor relations, required rate of return, debt service coverage, FICO score, implied volatility, EBITDA, quality assurance, cancelled check, minority interest, margin rate, balance sheet, ex-dividend, class C shares, irrevocable trust, open position, 1035 exchange, phantom income, ex-dividend date, inflation, diluted share, VIX, Key Rate Duration, LIBOR

Accounting | Banking | Bonds | Brokers | Economy | Futures | Mutual Funds | Options | Real Estate | Retirement | Stocks | Taxes | Technical Analysis
Home | Term of the Day | Suggest a Term | Chart of the Day | Dogs of the Dow
©2004-2015 Investor Glossary - All rights reserved - Terms of Use