Canonical formula calculator
NET INCOME
The most basic measure of whether the business made money in a period — and how much.
All revenue generated in the period, before any costs.
All expenses incurred in the period. Includes COGS, operating costs, taxes, interest, depreciation — everything.
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What this tells you
Net income is the cleanest measure of whether your business made money. It is the bottom line: revenue minus every expense you incurred, including taxes, interest, and depreciation. A positive number means the business generated profit. A negative number means it lost money. Everything else is commentary.
When to use it
Calculate net income monthly, quarterly, and annually. Track the trend. A business that is consistently net-income-positive is durable. A business that is net-income-negative for months is either pre-profitability (a stage) or in trouble (a state). Knowing which is the most important question you can answer about your own business.
What it doesn’t tell you
Net income does not tell you about cash. A business can be net-income-positive on paper but cash-negative if customers have not paid yet. It also does not tell you about quality of revenue — $100K in net income from $1M revenue is very different from $100K from $10M revenue. Pair net income with cash flow and net profit margin for the full picture.
Coming soon
Cases, plays, and benchmarks for this metric will appear here as the Moonshot knowledge libraries grow. For now: log in to track your number over time and Moonshot will surface trend warnings when the substrate fills in.