Accounting glossary
What is net income?
The P&L's bottom line: revenue minus everything — COGS, operating expenses, interest, depreciation. Net income rolls into retained earnings at year-end, which is how one year's work becomes next year's equity.
Example
Gross profit of $65,700 less operating expenses of $41,000 leaves $24,700 of net income — the bottom line for the period.
It is what remains after every cost, which is why it is the figure a lender or a buyer looks at first.
In SeroBooks
The year-end close performs that roll automatically, then locks the period. Year-end close →