Glossary
Net Income
Net income is what remains of revenue after subtracting every cost of running the business for a period — cost of goods sold, operating expenses, interest and tax. It is the bottom line of the income statement and it is what feeds retained earnings and, for many owner-managed corporations, the pool available for a dividend. Net income is not the same as cash: because it is calculated on the accrual basis it includes revenue not yet collected and non-cash charges such as depreciation, which is why a profitable business can still run short of cash. A part-time CFO typically tracks net income alongside EBITDA so financing costs and non-cash items do not get lost in the headline number.
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