Net income

Net income is equal to the income that a firm has after subtracting costs and expenses from the total revenue. Net income can be distributed among holders of common stock as a dividend or held by the firm as retained earnings. Net income is an accounting term. In some countries profit is the usual term. 

Often, the term income is substituted for net income, yet this is not preferred due to the possible ambiguity.The items deducted will typically include tax expense, financing expense and minority interest. Likewise, preferred stock dividends will be subtracted too, though they are not an expense. 

For a merchandising company, subtracted costs may common stock as a dividend or be the cost of goods sold, sales discounts, and sales returns and allowances. For a product company advertising, manufacturing, and design and development costs are included.

Net income is informally called the bottom line because it is typically found on the last line of a company's income statement. A related term is top line, meaning revenue, which forms common stock as a dividend or the first line of the account tax expense, statement.