Net Income Template

Download our free Net Income Template and master the calculation of this critical profitability metric. This template will walk you through determining a company’s normalized net income by guiding you to adjust for non-recurring items and properly account for non-controlling interests.

What is Net Income

Net income, often referred to as “the bottom line”, represents the total profit a company generates after accounting for all revenues and expenses over a period.

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• Income Statement Template
• Cash Flow Statement Template
• Discounted Cash Flow Valuation Template

Steps for Using the Net Income Template

• Download the free Net Income Template
• Replace the example numbers in the blue font color cells with your own figures from your company’s income statement.
• Add or remove line items as needed for your specific analysis by selecting the row, right-clicking, and choosing Insert or Delete.
• Verify that the formulas in the black font color cells correctly capture all line items, including any new ones you’ve added.
• Identify any non-recurring expenses on the income statement.
• Calculate the normalized pre-tax income by adding back those non-recurring expenses to the reported Profit Before Tax figure per the template guidance.
• Input your company’s Marginal Tax Rate into the template.
• The template will estimate the tax impact of the non-recurring adjustment using the marginal rate, increasing the Tax Expense accordingly.
• The template will then calculate the final Normalized Net Income by taking the cleaned Pre-Tax Profit and subtracting the adjusted Tax Expense.
• You’ve now successfully calculated an accurate Normalized Net Income figure removing any non-recurring items for more informed profitability analysis.

What you will Learn

• How to add back non-recurring expenses to the reported profit before tax to get a “cleaned” pre-tax profit figure.
• How to estimate the tax impact of the non-recurring expense adjustment using the marginal tax rate.
• How to calculate the normalized net income by taking the cleaned pre-tax profit and subtracting the adjusted tax expense that accounts for the non-recurring item’s tax impact.
• The importance of normalizing net income to remove fluctuations from one-time, non-operational items to better analyze a company’s core profitability.

Download the Free Template

Enter your email in the form and download the free template now!

Income Statement Template

Cash Flow Statement Template

Discounted Cash Flow Valuation Template