Net Income

The amount remaining after subtracting all the costs (for example, labor, materials, depreciation, interest, taxes, etc.) from a company's revenues. Net income is sometimes called the bottom line, net earnings or net profit.

While retained earnings represent net income since the inception of the company until the most recent accounting period, the net income line shows the financial bottom line for the current fiscal year only.

Learn how to analyze a balance sheet in terms of company's liquidity and solvency using financial ratios such as the current ratio, quick (or acid) ratio, debt to asset ratio and debt to equity ratio.