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Financial statements
Net income
The bottom line: what is left after every cost, interest, and tax. What flows to retained earnings.
Owned by: Entry analystTest band: Entry analyst
In practice
Net income can be positive while cash falls (growing receivables, capex) and negative while cash rises. Never read it alone.
The kind of thing the test asks
- A business reports net income of $50k but its cash balance fell by $30k. Which explanation is possible?
More in financial statements
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