Net income on the balance sheet is a representation of a company’s profitability within a given period. It is calculated by subtracting operating expenses, taxes, and other necessary payments from total revenue. The net income can be used to measure how efficient a business is at managing its money and generating profits. A positive net income indicates that the business is successful, while a negative net income shows that it is currently losing money. By tracking this metric regularly, businesses can understand their financial health and make better decisions that will lead to long-term success.