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what is net income formula used for. What Is the Net Income Formula. Net Income Total Revenues Total Expenses.
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What Is the Net Income Formula. It differs from other profitability metrics in that it considers all expenses -- cash and non-cash operating and non-operating -- to provide a bottom-line figure consistent with generally accepted accounting principles. It is used in ratio analysis to determine the proportional profitability of a business.
This is the formula for finding ending retained earnings.
Net income margin is the net after-tax income of a business expressed as a percentage of sales. It is especially useful when tracked on a trend line to see if there are any spikes or dips in the long-run average net income margin. If you have more revenues than expenses you will have a positive net income. Income includes for the purposes of SSI the receipt of any item which can be applied either directly or by sale or conversion to meet basic needs of food or shelter.
