Net income

Net income is a fancy word that describes how much money you have left over after you pay all your bills and expenses. It's like figuring out how much allowance you have left after you pay for your toys, snacks, and other things you want or need.

So, imagine that you receive money every week from your parents as your allowance. You decide to buy some chocolates, toys, and also give some money to charity. Now, you subtract the cost of chocolates, toys, and the donation from the money you received from your parents. The amount you have left after doing all of those calculations is your net income.

Similarly, companies and businesses also have income, but they also have expenses like paying employees, buying equipment, and advertising. They subtract all their expenses from their income to figure out their net income. It's important for businesses to have a positive net income because that means they have money left to reinvest back into their company or pay dividends to their shareholders.

In summary, net income is like the leftover money you have after paying for all your expenses. It's important for both individuals and companies to keep track of their net income.