Net Income

Net Income

Net Income
The Profit left for the owners, after all costs, expenses, interest and taxes have been paid. Also called Net Profit.

Return On Sales (ROS)
Ratio: Net Income as a percentage of Sales

Net Income (or Net Profit) is the Profit left for the owners, after all costs, expenses, interest and taxes have been paid.

Example:
• Sales of 200 less COS (80) less Operating expense (70) less interest expense (20) and income tax (10) leaves Net Income of 20.
• Net Income of 20 divided by Sales of 200 equals Return on Sales of 10%.

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