Adjusted net income is a financial metric that reflects a companys net income after adjusting for certain items. The adjustments are made to provide a more accurate picture of the companys financial health, sustainability, and growth potential. Adjusted net income is used in different contexts, such as in tax calculations, business valuation, and personal allowances. Here are some key points about adjusted net income:

• Adjusted net income is the excess of gross income for the tax year (including gross income from any unrelated trade or business) determined by subtracting the deductions allowed by the tax code.
• Adjusted net income is calculated by adding or removing income and cost items that do not adequately reflect the operation being transferred.
• Adjustments made to net income can include adding back in depreciation and amortization of assets, one-time payments made for events such as lawsuits or equipment purchases, personal business expenses of the current owner, and rent if the property is not owned.
• Adjusted net income can help investors and analysts evaluate a companys profitability by focusing on its core operations.
• Adjusted net income is a non-GAAP financial measure, meaning it does not adhere to standardized accounting rules, and different companies may calculate it differently, making it challenging to compare across different businesses.

In summary, adjusted net income is a financial metric that provides a more accurate picture of a companys financial health by adjusting its net income for certain items. It is used in different contexts, such as in tax calculations, business valuation, and personal allowances.