Glossary/Cash Flow & Income Statement

Čistý zisk

Net Income · Net Profit · Bottom Line

The profit left after subtracting all costs, interest, and taxes.

Cash Flow & Income Statement

What it is

Net Income is the "bottom line" of the income statement (profit & loss statement). It is what remains for the company from revenue after paying:

  • Direct costs (COGS)
  • Operating expenses (OPEX)
  • Depreciation and amortization
  • Interest on debt
  • Taxes

Net Income ≠ cash. It includes non-cash items (depreciation) and ignores working capital movements and CAPEX.

Why track it

Net Income is the foundation for calculating EPS and the P/E ratio. Monitor:

  • Absolute value and trend — is net income growing faster than revenue? (signal of operating leverage)
  • Net profit margin = Net Income / Revenue
  • Earnings qualityFCF Conversion Ratio reveals whether net income is "real" or inflated by accounting choices

Real-world example

Microsoft FY2025: Net income $87.3 billion (net margin ~35%). FCF $84.5 billion — FCF Conversion Ratio 0.97, confirming high earnings quality with no accounting tricks.