The Net Income Ratio Formula is a simple equation used to calculate the profitability of a business. This formula takes the net income (also known as net profit) of a company and divides it by their total revenue. This ratio can be used to compare companies, or between different periods of time. It’s an important tool for managers and investors alike, giving them insight into how profitable the company is. By tracking this ratio over time, they can see how well the company is performing and make better decisions about investments.