Calculating net income is a fundamental process for businesses of all sizes. It’s the process of determining your business’s overall profitability, or net profit, after accounting for all sources of revenue and expenses. To calculate net income, take your total revenue and subtract any costs associated with creating that revenue (e.g., cost of goods sold). The result is your gross profit. From there, subtract any other operating costs like taxes, marketing, and labor to determine your net income. By calculating your net income, you can assess whether your current strategies are working and identify areas in need of improvement.