Net income is a company’s total earnings or profit. This figure is calculated by subtracting all expenses from revenue. Net income can be positive or negative, depending on whether a company has made a profit or loss during the accounting period.

To calculate net income, start with a company’s total revenue for the accounting period. Then, subtract any operating expenses, cost of goods sold, interest expense, and taxes. The resulting figure is the net income.

Here is an example:

Company A has total revenue of $100,000 for the accounting period. Operating expenses are $40,000, cost of goods sold is $30,000, interest expense is $10,000, and taxes are $5,000. The calculation for net income would be as follows:

$100,000 – $40,000 – $30,000 – $10,000 – $5,000 = $15,000

Therefore, Company A has a net income of $15,000.