How does net income differ from comprehensive income?

Net income represents the profit earned by a company after all operating and non-operating expenses have been deducted from revenues, providing a measure of the company's profitability during a specific period. Comprehensive income, on the other hand, expands on this concept by including not only net income but also other comprehensive income items. These additional items can consist of unrealized gains and losses on certain investments, foreign currency translation adjustments, and pension plan adjustments, which are not reflected in the net income calculation.

The correct answer highlights that comprehensive income encompasses net income and these other items, thus offering a broader view of a company's overall financial performance and changes in equity during a reporting period. This distinction helps stakeholders understand a company's total economic performance beyond just the profits derived from its core operations.

By including these additional components, comprehensive income captures the effects of various economic events that affect the company's equity but do not necessarily impact net income in the same accounting period, thereby providing a more complete picture of financial health.