Which line on a financial statement shows net profit or loss?

• A. Bottom Line
• B. Gross Profit
• C. Net Income
• D. Operating Income

Answer: (B)

Net Income on the income statement is the amount that shows net profit or loss. It’s the final figure after all revenues have been reduced by every expense, including cost of goods sold, operating expenses, interest, and taxes. This is why it’s often referred to as the bottom line—the ultimate result of the company’s finances for the period. Gross Profit only accounts for revenues minus the cost of goods sold and doesn’t reflect operating costs or taxes, so it isn’t net profit. Operating Income reflects profit from core operations before interest and taxes, again not the final net result. So Net Income is the line that truly represents the net profit or loss.