The Income|Outcome^® Contextuary

Net Income (in the US) or Net Profit (in the UK) is the Profit for the operating period.

Calculation: Sales less all Costs & Expenses

Return on Sales ratio: Net Income as a percentage of Sales

Example: The Round Number Company Sales = 200; COS = 80; OpEx = 72; Finance = 8; Tax = 10; the adjustments cancel out Net Income = 200 - 80 - 72 - 8 - 10 = 30 Return on Sales or Profitability = 30/200 = 30 %

Net Income is the amount of Profit left for the owners, after all costs and expenses, including interest and taxes, have been paid.

Return on Sales is proportion of Profit to Sales, it is the Profitability of the business.

Net Income is also known as Net Profit or Earnings or Profit or the "Bottom Line".

Return on Sales is also known as Profitability or the Profitability Ratio.