How is net income defined?

Net income is defined as the total profit of a company after all expenses, taxes, and costs have been deducted from total revenue. This figure provides a clear measure of a company's profitability; it reflects how much money the company has actually made available to its shareholders and can be reinvested in the business or distributed as dividends.

Understanding this concept is crucial because net income serves as a key indicator of financial performance and health, giving stakeholders insight into how efficiently the company is operating. It's reported on the income statement and is a fundamental part of financial analysis, directly influencing decisions made by investors, creditors, and management.

Other options focus on different financial aspects that do not capture the complete picture of profitability. For example, total revenue refers only to income before any costs are deducted, while earnings before expenses and taxes still doesn’t account for all financial obligations. The option mentioning remaining earnings after dividends relates to retained earnings, which occurs after net income has been calculated. Thus, net income is specific to the final profit figure that encapsulates all deductions, making it the most accurate definition in this context.