Net Income Formula From Balance Sheet is a concept that explains how to calculate the net income of a business entity based on its balance sheet. This calculation takes into account the Revenue, Expenses and Taxes incurred by the company in order to arrive at a figure representing the overall financial performance. In order to determine this figure, one must subtract all expenses from the total revenues and taxes collected. It is important to note that the formula does not take into account any debt or equity financing sourced from outside sources. By accurately calculating a business’ net income, it helps stakeholders identify areas for improvement and measure success over time.