Business Income


DEFINITION of 'Business Income'

Any income that is realized as a result of business activity. Business income is a type of earned income, and is classified as ordinary income for tax purposes.

BREAKING DOWN 'Business Income'

Business income can be offset with business expenses and business losses. It can be either positive or negative in a given year.

  1. Passive Income

    Earnings an individual derives from a rental property, limited ...
  2. Earned Income

    Income derived from active participation in a trade or business, ...
  3. Ordinary Income

    Income received that is taxed at the highest rates, or ordinary ...
  4. Encumbrance

    A claim against a property by a party that is not the owner. ...
  5. EBITA

    Earnings before interest, taxes and amortization. To calculate ...
  6. Profit and Loss Statement (P&L)

    A financial statement that summarizes the revenues, costs and ...
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  1. How do I read and analyze an income statement?

    The income statement, also known as the profit and loss (P&L) statement, is the financial statement that depicts the ... Read Full Answer >>
  2. Do dividends affect working capital?

    Regardless of whether cash dividends are paid or accrued, a company's working capital is reduced. When cash dividends are ... Read Full Answer >>
  3. Do prepayments provide working capital?

    Prepayments, or prepaid expenses, are typically included in the current assets on a company's balance sheet, as they represent ... Read Full Answer >>
  4. How can companies use the cash flow statement to mislead investors?

    Cash flow is a means for most investors to examine the actual economics of a business they might invest in, especially from ... Read Full Answer >>
  5. Does working capital include salaries?

    A company accrues unpaid salaries on its balance sheet as part of accounts payable, which is a current liability account, ... Read Full Answer >>
  6. What is a profit and loss (P&L) statement and why do companies publish them?

    A profit and loss (P&L) statement, or balance sheet, is essentially a snapshot of a company's financial activity for ... Read Full Answer >>

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