ACCOUNTING GLOSSARY
Net Income
Net Income
Profit after operating expenses, interest, taxes and other recognized costs.
What does Net Income mean?
Profit after operating expenses, interest, taxes and other recognized costs. Professionals may calculate, document or apply this concept differently depending on the transaction, accounting method, lender policy and governing documents. Borrowers should confirm the precise definition used in any term sheet or agreement.
Net Income in context
After all expenses and taxes, a business retaining $180,000 reports that amount as net income.
Why it matters in financing
Net Income can influence how a lender, investor or advisor evaluates risk, pricing, structure, repayment capacity or transaction economics. It should be considered together with the complete financial picture rather than used alone.
Related accounting terms
Educational information only. This definition is general, may not match a particular lender or contract, and is not financial, accounting, tax or legal advice.