Net income cannot be calculated directly from the balance sheet alone
Use the income statement to find net income
Net income = Revenue – Expenses – Taxes – Interest
If only balance sheet data is available, estimate net income by comparing retained earnings between periods
Net income ≈ Ending retained earnings – Beginning retained earnings – Dividends
Use the change in equity accounts only if no other equity transactions occurred
Check for stock issuances, buybacks, dividends, and other equity adjustments before estimating
For accurate net income, reconcile with the cash flow statement and income statement