# How to Find Net Income on an Income Statement

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An income statement is one of several documents all publicly held companies produce so that investors can track the company's financial health. Two figures you can calculate from net income are the company's net income before taxes and the company's net income after taxes. You can use these figures to figure out the profitability of the company relative to prior years or relative to other companies you are considering investing in. To calculate the net income, you need to know the company's total revenues, various costs and income taxes paid.

Add up all of the company's costs of purchasing, producing and selling the goods. For example, if the company pays \$1 million for the raw materials, \$2 million to process them and \$1.5 million to sell them, the total costs equal \$4.5 million.

Subtract the total costs from the total revenue to find the net income before taxes. For example, if the company brings in \$8 million in revenue, subtract \$4.5 million from \$8 million to get \$3.5 million as the net income before taxes.

Subtract the company's taxes paid from the net income before tax to find the company's net income after taxes. In this example, if the company pays \$1.7 million in taxes, subtract \$1.7 million from \$3.5 million to find the company's net income after taxes equals \$1.8 million.