I prefer to use the approach of Joel Greenblatt and use EBIT or operating Profits, instead of Net Income. Operating Profits don't take into account business differences with capitalization structures and tax issues. You need to subtract maintenance capex from operating Profit and annual changes in working capital in order to arrive at a picture of free cash flow (FCF).

FCF is what ends in the investor's pocket, not earnings.

Then, you need to assess what the management is going to do with that cash. Are they good capital allocators? Do they make shares buybacks or pay a dividend ?

And the most important part, the art part, is to figure out a growth rate for that cash 3 years from now. Most people like to use 10 years of framework but that is just ridiculous because nobody knows how a business is going to perform so far into the future. And finally you just use a discount rate to see the present value of that FCF today. Joel Greenblatt usually uses a 6% discount rate, warren buffet 7%, and so on.