Start with total revenue for the period
Subtract total expenses for the period
Include cost of goods sold (COGS) within expenses if applicable
Subtract operating expenses (e.g., selling, general, and administrative)
Subtract interest expense (if not already included in expenses)
Subtract taxes (income tax expense)
Add any other income (e.g., interest income, gains)
Subtract any other losses (e.g., losses, impairment)
Use the formula: Net Income = Total Revenue − Total Expenses (including taxes and interest) + Other Income − Other Losses
Verify by reconciling to net income reported on the income statement (if available)