How is net income defined?

Net income is defined as the amount of money a business has left over after all expenses, including taxes, have been deducted from total revenue. This definition indicates that net income reflects the company's profitability and financial health during a given period. The correct answer emphasizes that it is calculated after taxes, which is crucial for accurately assessing how much profit a company retains.

This distinguishes net income from other financial metrics; for example, gross profit does not account for operating expenses or taxes, and simply subtracting total expenses from sales provides a clear guideline. However, without factoring in taxes, the resulting figure would not be considered net income. Therefore, the focus on the completion of deductions, including taxes, solidifies why this choice is the accurate representation of net income.