What does net income indicate about a business?

Net income is a key indicator of a business's profitability, calculated as total revenue minus total expenses. This figure reflects how much profit a company has generated over a specific period after accounting for all costs, including operating expenses, taxes, interest, and any other expenses. A positive net income indicates that the company is earning more than it spends, which is essential for sustainability and growth.

In contrast, the other options present related but distinct financial concepts. The amount of cash available for distribution to shareholders relates to cash flow rather than net income; total assets minus total liabilities defines equity and the company's net worth, not its profitability; and the revenue earned before deducting costs refers to gross revenue, not net income. Understanding the definition of net income is crucial for evaluating a company’s financial health.