Net Income = 200,000 - 150,000 = 50,000
Understand the Problem
The question is presenting a basic calculation to determine net income by subtracting total expenses from total revenue. The question implies that the user is looking for confirmation or clarification on the calculation process.
Answer
The net income is calculated using the formula $$ \text{Net Income} = \text{Total Revenue} - \text{Total Expenses} $$.
Answer for screen readers
The net income is calculated as follows: $$ \text{Net Income} = \text{Total Revenue} - \text{Total Expenses} $$
Steps to Solve
- Identify Total Revenue
First, find out the total revenue earned. This is the amount before any expenses are deducted.
- Identify Total Expenses
Next, determine the total expenses incurred. This includes all costs, such as rent, utilities, salaries, and other operating costs.
- Calculate Net Income
Subtract the total expenses from the total revenue using the formula: $$ \text{Net Income} = \text{Total Revenue} - \text{Total Expenses} $$
- Interpret Result
The result of this calculation represents the net income. A positive number indicates profit, while a negative number indicates a loss.
The net income is calculated as follows: $$ \text{Net Income} = \text{Total Revenue} - \text{Total Expenses} $$
More Information
Net income is a crucial metric for businesses, as it indicates financial health. It reflects how much money remains after all expenses are paid. Understanding net income can help in making financial decisions and assessing business performance.
Tips
- Forgetting to include all expenses in the calculation: Make sure all relevant expenses are accounted for to avoid overestimating net income.
- Wrongly interpreting the result: A negative net income indicates a loss, not a profit.
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