Net Income
The bottom line: total revenue minus all expenses, taxes, and interest payments. What the company actually earned for shareholders during the period. Can be distorted by one-time items, accounting choices, and tax timing. Always read alongside cash flow to confirm quality of earnings.
Why it matters
The basis for EPS and P/E calculations. It's what the company actually earned for shareholders after everything is paid. However, it includes non-cash items and one-time charges that can distort the true economic picture.
How to read it
Look at "adjusted" vs. GAAP net income — persistent large adjustments are a red flag. Compare net margin trends over time. One-time gains/losses should be excluded when assessing recurring profitability.
Lessons that use this term
Related terms
Ambiguity Aversion · Anchored Assumption · Asset Beta · Bank ROE Spread · Banker Pitch Deck · Beta
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