Editing Net income (section)

==Definition==
Net income can be distributed among holders of common stock as a [[dividend]] or held by the firm as an addition to [[retained earnings]]. As [[Profit (accounting)|profit]] and [[earnings]] are used synonymously for [[income]] (also depending on UK and US usage), '''net earnings''' and '''net profit''' are commonly found as synonyms for net income. Often, the term '''income''' is substituted for net income, yet this is not preferred due to the possible ambiguity. 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 the first line of the account statement).

In simplistic terms, net profit is the money left over after paying all the expenses of an endeavor. In practice this can get very complex in large organizations. The [[bookkeeper]] or [[accountant]] must itemise and allocate revenues and expenses properly to the specific working scope and context in which the term is applied.

Net income is usually calculated per annum, for each [[fiscal year]]. The items deducted will typically include [[tax expense]], financing expense ([[interest expense]]), and minority interest. Likewise, 
[[preferred stock]] dividends will be subtracted too, though they are not an expense. For a [[Merchandising (play)|merchandising]] company, subtracted costs 
may be the [[cost of goods sold]], sales discounts, and sales returns and allowances. For a product company, [[advertising]], 
[[manufacturing]], & design and development costs are included. Net income can also be calculated by adding a company's operating income to non-operating income and then subtracting off taxes.<ref name="nbp">{{cite web|url=http://newbusinessplaybook.com/net-income-formula/|title=Net Income Formula|publisher=New Business Playbook|archive-url=https://web.archive.org/web/20131019070557/http://newbusinessplaybook.com/net-income-formula/|archive-date=2013-10-19|url-status=usurped}}</ref>

The net [[profit margin]] percentage is a related ratio. This figure is calculated by dividing net profit by revenue or turnover, and it represents profitability, as a percentage.