Profit after all expenses, interest, and taxes are deducted from revenue.
For example, a restaurant generates $900,000 in revenue, pays $720,000 in operating expenses and $30,000 in interest, and owes $37,500 in taxes — leaving net income of $112,500, which the owner can reinvest in the business, retain for future needs, or distribute as dividends.
Why it matters: It is the ultimate bottom line; it determines how much wealth was created for the owners after all taxes and obligations.
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