The equation for determining Net Income is?

The equation for determining Net Income is accurately represented by the equation where net income is calculated as revenues minus expenses. This means that net income reflects the company's profitability after accounting for all costs associated with generating revenue.

Revenues represent the total income generated from sales of goods or services before any expenses are deducted, while expenses include all costs required to operate the business and generate that revenue. When you subtract total expenses from total revenues, you obtain the net income figure, which is a crucial measure of a company’s financial performance over a specific period.

This fundamental relationship is essential in financial analysis, as it directly influences other key financial metrics, including earnings per share, return on equity, and overall business valuation. Thus, understanding that net income is derived from the difference between revenues and expenses is critical for evaluating a company's profitability and operational efficiency.