Which term refers to the profits retained by the company after all expenses have been deducted?

Study for UCF's FIN3403 Exam. Access flashcards, multiple choice questions, and explanations. Excel on your exam!

Net Income refers to the profits retained by a company after all expenses have been deducted from total revenue. It represents the company's actual profit, which can be reinvested into the business or distributed to shareholders. This metric is crucial for assessing a company's financial health and performance over a specific period.

In contrast, Operating Expenses represent the costs required to run the company but do not include direct production costs. Gross Profit refers to the income a company makes from sales after subtracting the direct costs associated with producing the goods or services sold, but before accounting for operating expenses, taxes, and interest. Dividends Per Share indicates the amount of money a company returns to its shareholders per share, which is derived from the profits but does not represent the total retained earnings or net income of the company itself.

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