Net income seems straightforward: It is the result when expenses (administrative expenses, business expenses, interest expenses, operating costs and other expenses) are subtracted from revenue. This ...

To stay in business, your company needs to earn more than it spends, at least over the long term. A net income formula tells you whether you are earning or losing money. However, this equation only ...

One of the most useful metrics in assessing a company's profitability is earnings per share, and it can be calculated from information found on that company's balance sheet and income statement, two ...

When your company makes a profit, you can issue a dividend to shareholders or keep the money. The profits you keep are called retained earnings. You can use retained earnings to fund working capital, ...

Net income is found by adjusting owners' equity for profits, losses, and capital changes. Use owners' equity changes to determine company profit or loss for accouting periods. One of the benefits of ...

Many investors focus on how much a company pays in dividends. Most companies report their dividends on a cash-flow statement or in a separate accounting summary in their regular disclosures to ...

A balance sheet displays what a company owns, what it owes, how it's financed, and its shareholders' equity at a particular point in time. An income statement displays the company's revenues and ...

Understanding cash flow statements is important because they measure whether a company generates enough cash to meet its operating expenses.

One of the benefits of understanding how the income statement and balance sheet work together is that you can figure out missing pieces of information based on numbers elsewhere in the financial ...