Which term describes the money left over after revenues minus expenses?

The concept of net income is fundamental in accounting and finance. It refers to the amount of money a business has after it has deducted all its expenses from its total revenues. This figure is crucial because it provides insight into the profitability of a company over a specific period, such as a quarter or a year.

Net income serves as an indicator of a company's financial health and performance. It reflects how efficiently a company is operating and whether it is succeeding in managing its costs relative to its revenues. This figure is commonly reported in the income statement and is often referred to when discussing a company's profitability, earnings per share, and return on equity.

In contrast, the other terms listed refer to different financial concepts. Retained earnings, for example, represent the cumulative amount of net income retained in the company rather than distributed as dividends. Gross profit measures the difference between revenue and the cost of goods sold, not accounting for other expenses. Operating cash flow relates to the cash generated from the business's operational activities, which isn’t the same as net income since it doesn’t factor in all expenses comprehensively. Understanding the distinction between these terms helps clarify why net income specifically refers to the profit remaining after all expenses have been accounted for.