Dr. Paul Borosky, DBA, MBA
Business Consultant & Author
Guide 10 of 34 · The Income Statement
How to Calculate Net Income (Apple Example)
One number at the bottom. Every line above it explains it.
Net income is the profit left after every cost, every interest payment, and every tax bill. Apple’s fell two years in a row, then jumped 19.5% to a record. The formula takes one line. Reading why it moved takes five years of numbers.
Last Updated: 10/27/2026 · Written by Dr. Paul Borosky, DBA, MBA
The Short Answer
What Is the Net Income Formula?
Textbook Definition
Net income is revenue minus cost of goods sold, operating expenses, interest, other items, and income taxes for the period. It is the final line of the income statement.
In Plain English
Net income is what is left after the company pays for everything. It is the money it can pay out to owners as dividends or keep to grow the business. People call it the bottom line because it sits at the bottom.
Net Income
Revenue − All Costs − Interest − Taxes
Apple, fiscal 2025: $112.0 billion
The Short Way
Earnings Before Taxes − Taxes
132,729 − 20,719 = 112,010 ($M)
Net income is the last stop on the income statement. The two lines right above it, operating income and earnings before taxes, are covered in operating income vs. EBT.
One Real Company
Apple’s Net Income, 2021 to 2025
Read the growth row. Two small drops, then a big jump. The question is always why.
| Line | 2025 | 2024 | 2023 | 2022 | 2021 |
|---|---|---|---|---|---|
| Revenue | 416,161 | 391,035 | 383,285 | 394,328 | 365,817 |
| Earnings before taxes | 132,729 | 123,485 | 113,736 | 119,103 | 109,207 |
| Taxes | 20,719 | 29,749 | 16,741 | 19,300 | 14,527 |
| Net income | 112,010 | 93,736 | 96,995 | 99,803 | 94,680 |
| Net income growth | 19.5% | −3.4% | −2.8% | 5.4% | n/a |
| Net profit margin | 26.9% | 24.0% | 25.3% | 25.3% | 25.9% |
Source: Apple Form 10-K filings, fiscal 2021 to 2025, as analyzed in the book. $ millions.
The Method
How to Read Net Income in 5 Steps
Find the dollar figure.
It is the last line of the income statement. In a 10-K it is labeled net income. Write down five years, not one.
Calculate the growth rate.
This year minus last year, divided by last year. Apple went 5.4%, −2.8%, −3.4%, then 19.5%.
Turn it into a margin.
Divide net income by revenue. Apple’s net margin moved between 24.0% and 26.9%. A margin shows how much of each sale the company keeps.
Look for one-time items.
Apple’s 2024 dip came mostly from a one-time European tax charge. The tax rate spiked to 24.1% that year, then fell back to 15.6%.
Check it against cash.
Net income is an accounting number. Compare it to cash from operations to see if the profit showed up as real money.
Why a Record Year Got a B+
Apple posted record profit in 2025. So why not an A? Because net income slipped two years in a row before that, and a grade weighs the trend, not one great year. The 2024 drop came from taxes, not from the business weakening, which the effective tax rate guide breaks down line by line.
Compare It
Apple vs. Microsoft: More Profit, or More Profit per Dollar?
| Latest fiscal year | Apple | Microsoft |
|---|---|---|
| Net income | $112B | $102B |
| Revenue | $416B | $282B |
| Net profit margin | 27% | 36% |
Microsoft’s fiscal year ends in June, Apple’s in September.
Apple makes more total profit. Microsoft keeps more of each dollar, about 36 cents versus Apple’s 27. Two different paths to a giant bottom line. That is why you always look at the dollar figure and the margin together.
After the Bottom Line
Where Does Apple’s Net Income Go?
Net income has two exits. It can go back to shareholders, or it can stay in the company. Apple sends most of it back. Dividends run about $15 billion a year. Stock buybacks run $78 billion to $95 billion a year. Add those up and Apple returns more than it earns in most years.
That choice shows up on the other two statements. On the balance sheet, retained earnings fell from positive $5.6 billion in 2021 to about negative $14.3 billion in 2025. On the cash flow statement, the financing section shows the cash leaving.
One more check is worth the ten seconds. Compare net income to cash from operations. In fiscal 2025 Apple reported $112.0 billion of net income and $111.5 billion of operating cash flow. When the two sit that close, the profit is real money, not just an accounting result.
| Fiscal 2025 ($ millions) | Amount |
|---|---|
| Net income | 112,010 |
| Cash from operations | 111,482 |
| Dividends paid | 15,421 |
Source: Apple Form 10-K, as analyzed in the book.
Beginner Traps
What Do Beginners Get Wrong About Net Income?
- Reading net income without the four lines above it.
- Calling a down year a crisis before checking for one-time items.
- Comparing dollar profit across companies of different sizes.
- Ignoring the margin, which shows profit per sales dollar.
- Treating net income as cash in the bank.
- Forgetting that buybacks and dividends come out of it.
How the Book Grades These Lines
From the Book
The Dip That Was Not a Problem
Income Statement · Net Income
Reading Apple’s 2024 Drop
I do not want that dip to alarm you, because a big piece of the 2024 decline came from a one-time European tax charge rather than from the business weakening.
Every income statement line, five years of Apple numbers, and a grade for each. It is all in the book.
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Net Income Questions
How do you calculate net income?
Is net income the same as profit?
What can a company do with net income?
Is net income the same as cash flow?
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Related Guides
Every term on this page is in the glossary.
Written by Dr. Paul Borosky, DBA, MBA, business consultant, author, and adjunct finance instructor with an MBA focused in finance.
This page is for general educational purposes only. It is not investment, financial, tax, accounting, or legal advice, and nothing here is a recommendation to buy or sell any security. Apple and Microsoft figures come from their public filings as analyzed in the book. Apple and Microsoft are trademarks of their respective owners, and this page is not affiliated with or endorsed by either company.