Question

How can we find Net income?​

Answer 1

Answer:

The net income formula is calculated by subtracting total expenses from total revenues. Many different textbooks break the expenses down into subcategories like cost of goods sold, operating expenses, interest, and taxes, but it doesn't matter. All revenues and all expenses are used in this formula.

Answer 2

Answer:

You can calculate net income by subtracting the cost of goods sold and expenses from your business’s total revenue.

Before calculating net income, you need to understand the gross income formula:

⏩Gross Income = Revenue – Cost of Goods Sold

Now, take a look at the net income formula:

⏩Net Income = Gross Income – Expenses

Or, you can use the following formula to calculate net income:

⏩Net Income = Revenue – Cost of Goods Sold – Expenses