Net income

Net income (résultat net) is the bottom-line profit or loss of a company after all revenues and expenses — operating costs, depreciation, financial charges, taxes and exceptional items. In financial due diligence, it is less reliable as a performance benchmark than EBITDA because it incorporates accounting policy choices (depreciation rates, provisioning), financing structure effects and non-recurring items. It remains relevant for dividend capacity analysis, earnings per share calculation and tax planning. Its reconciliation with operating cash flow (indirect method) is a powerful earnings quality check.

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Example: a Swiss company reports net income of CHF 1.8 million on CHF 18.0 million revenue (10% net margin). Due diligence reveals CHF 450,000 of non-recurring gains and CHF 280,000 of deferred tax benefits inflating net income. Normalised net income is CHF 1.07 million (5.9% margin) — more representative of sustainable earnings capacity and the basis for distribution policy analysis post-acquisition.

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Hectelion normalises net income alongside EBITDA to provide a complete picture of sustainable earnings in every quality of earnings review.