What is also known as profit and is calculated as revenue less expenses?

What is also known as profit and is calculated as revenue less expenses?

• A. Gross Profit
• B. Net Income
• C. Operating Profit
• D. Profitable Earnings

Answer: (B)

Net Income is often referred to as profit, as it represents the amount of money a company retains after all expenses, taxes, and costs are subtracted from total revenue. This metric provides a clear picture of a company's profitability over a specified period. Net Income is crucial for investors and stakeholders as it indicates the financial health of a business and its ability to generate profit from its operations. It encompasses all forms of expenses—operating and non-operating—hence providing a comprehensive overview of what the company has earned after all financial obligations have been met. This makes it a vital indicator for assessing overall performance and sustainability in business operations. In contrast, metrics like Gross Profit or Operating Profit focus on specific segments of profitability before accounting for all expenses, which does not give as complete a picture as Net Income does.

Net Income is often referred to as profit, as it represents the amount of money a company retains after all expenses, taxes, and costs are subtracted from total revenue. This metric provides a clear picture of a company's profitability over a specified period.

Net Income is crucial for investors and stakeholders as it indicates the financial health of a business and its ability to generate profit from its operations. It encompasses all forms of expenses—operating and non-operating—hence providing a comprehensive overview of what the company has earned after all financial obligations have been met. This makes it a vital indicator for assessing overall performance and sustainability in business operations.

In contrast, metrics like Gross Profit or Operating Profit focus on specific segments of profitability before accounting for all expenses, which does not give as complete a picture as Net Income does.