TradeAlmanac
Sign in

Net income

What remains after every expense, interest payment and tax.

How to read the number

Dividends are paid out of it and P/E is calculated from it. It is the best known and the most easily distorted figure in the accounts.

When the metric lies

Net income is sensitive to paper items — asset revaluations, foreign exchange differences, deferred taxes. It can double without a single extra unit being sold.

Where it is used

The metric is calculated across every security in the catalogue and appears on the instrument card, in the multiples table and in the screener.

Also known as: net income, net profit, bottom line

Related terms