# Net Income (NI) Definition: Uses, and How to Calculate It.

Net Income Definition: Uses and How to Calculate It.

#### What are the 3 main parts of an income statement?

1. Revenue: This is the total amount of money that the company has earned from its sales and other activities over a period of time.

2. Expenses: This is the total amount of money that the company has spent on its operations over a period of time.

3. Net Income: This is the difference between the revenue and the expenses, and it represents the company's bottom line. What are the 5 accounting terms? The 5 accounting terms are:

1. Revenue
2. Expenses
3. Assets
4. Liabilities
5. Equity

### How do you calculate income statement?

Income statements show a company's financial performance over a specific period of time. The income statement includes revenue, expenses, and profits. To calculate the income statement, you will need to use financial information from the company's balance sheet and income statement.

First, you will need to calculate the company's total revenue. Revenue is the total amount of money that the company has earned from sales of its products or services. To calculate total revenue, you will need to add up all of the company's sales for the period that you are interested in.

Next, you will need to calculate the company's total expenses. Expenses are the costs that the company incurs in order to generate its revenue. To calculate total expenses, you will need to add up all of the company's costs for the period that you are interested in.

Finally, you will need to calculate the company's net profit. Net profit is the company's total revenue minus its total expenses. To calculate net profit, you will need to subtract the company's total expenses from its total revenue.

Is net income the same as profit? No, net income is not the same as profit. Net income is equal to a company's total revenue minus its total expenses. Profit, on the other hand, is equal to a company's total revenue minus its total costs. Total costs include the cost of goods sold, operating expenses, and taxes.

What are the 5 types of financial statements? There are five types of financial statements: balance sheets, income statements, cash flow statements, statements of shareholders' equity, and statements of comprehensive income.

1. Balance sheets show a company's assets, liabilities, and shareholders' equity at a specific point in time.

2. Income statements show a company's revenues, expenses, and net income for a specific period of time.

3. Cash flow statements show a company's cash inflows and outflows for a specific period of time.

4. Statements of shareholders' equity show a company's changes in shareholders' equity for a specific period of time.

5. Statements of comprehensive income show a company's net income and other comprehensive income for a specific period of time.