Net income, also known as profit or earnings, is a key financial metric used to evaluate a company's financial performance. It represents the amount of money a company earns after deducting all expenses and taxes. The components of net income include revenue, cost of goods sold, gross profit, operating expenses, interest expense, taxes, and other income or expenses.

Revenue is the total amount of money earned by a company from its operations. Cost of goods sold represents the direct costs associated with producing and selling goods. Gross profit is calculated by subtracting the cost of goods sold from revenue. Operating expenses are the indirect costs associated with running a business, such as salaries, rent, and utilities. Interest expense represents the cost of borrowing money. Taxes are the amount of money paid to the government as income tax. Other income or expenses include gains or losses from non-operating activities, such as investments or asset sales.

By understanding the components of net income, investors and analysts can better evaluate a company's financial health and make informed investment decisions.

Net income, also known as profit or earnings, is a key metric on a company's income statement, representing the residual amount after deducting expenses from total revenue. Its components include revenue, which is the total income generated from sales or services; cost of goods sold (COGS), reflecting the direct costs of producing goods or services; operating expenses, covering general and administrative costs; interest expenses, associated with borrowed capital; and taxes, representing income taxes owed to the government. Subtracting these components from revenue yields net income. This financial figure is crucial for assessing a company's profitability and financial health, providing valuable insights for investors, analysts, and stakeholders. Effective management of these components is essential for sustaining and growing a company's net income over time.