Editing Net income (section)

=== Example ===
Net profit on a P & L (profit and loss) account:

# [[Sales revenue]] = price (of product) × quantity sold
# [[Gross profit]] = sales revenue − cost of sales and other direct costs
# Operating profit  = gross profit − overheads and other indirect costs
# [[Earnings before interest and taxes|EBIT]] (earnings before interest and taxes) = operating profit + interest income + other non-operating income
# [[Earnings before taxes|EBT]] (Pretax profit, earnings before taxes) = EBIT − interest expenses − other non-operating expenses
# Net profit = EBT − tax
# [[Retained earnings]] = Net profit − dividends

Another equation to calculate net income:

[[Net sales]] (revenue) - [[Cost of goods sold]] = [[Gross profit]] - [[SG&A]] expenses (combined costs of operating the company) - [[Research and development]] (R&D) = [[Earnings before interest, taxes, depreciation and amortization]] (EBITDA) - [[Depreciation]] and [[amortization (accounting)|amortization]] = [[Earnings before interest and taxes]] (EBIT) - [[Interest expense]] (cost of borrowing money) = [[Earnings before taxes]] (EBT) - [[Tax expense]] = Net income (EAT)