What does net income represent for a company?

Net income is a key financial metric that reflects the profitability of a company after all expenses, including operating costs, interest, and taxes, have been deducted from total revenue. It is often referred to as the "bottom line" because it is located at the bottom of an income statement. This figure indicates how much profit a company has earned during a specific period and is crucial for assessing the company’s financial health and performance.

In the context of business finance, net income can be reinvested back into the business for growth, distributed to shareholders in the form of dividends, or retained for other purposes. An understanding of net income helps stakeholders evaluate the effectiveness of management in generating profit from the company's resources.

The other choices describe different aspects of a company’s financials but do not accurately define net income. For instance, total revenue before expenses does not account for the costs that reduce overall profits, while the amount owed to creditors pertains to liabilities and debts rather than income. Revenue distributed as dividends relates to the allocation of profits rather than the profits themselves. Therefore, the definition provided aligns perfectly with the concept of net income.