Revenue can most easily be thought of as the top line of an income statement or profit and loss statement.
Revenue is the total amount of income generated by the sale of goods or
services related to the company's primary operations. If the company is
a shoe retailer, the money it makes from selling shoes before
accounting for any expenses is its revenue. If the company also has
income from investments or from a subsidiary
company, that income is not considered revenue; it does not come from
the sale of shoes. Additional income streams and various types of
expenses are accounted for separately.
Revenue is the total amount of income generated by the sale of goods or
services related to the company's primary operations. If the company is
a shoe retailer, the money it makes from selling shoes before
accounting for any expenses is its revenue. If the company also has
income from investments or from a subsidiary
company, that income is not considered revenue; it does not come from
the sale of shoes. Additional income streams and various types of
expenses are accounted for separately.
Profit, conversely, is the infamous bottom line. This is called net profit, because it is the amount of income that remains after accounting for all expenses, debts, additional income streams and operating costs. In between the top and bottom line, the term "profit" may emerge in the context of gross profit and operating profit. These are steps on the way to net profit. Gross profit is revenue minus the cost of goods sold (COGS).
Operating profit is gross profit minus all other fixed and variable
expenses associated with operating the business, such as rent, utilities
and payroll. When most people refer to a company's profit, they are referring to the net income remainder after expenses, or the net profit.
Operating profit is gross profit minus all other fixed and variable
expenses associated with operating the business, such as rent, utilities
and payroll. When most people refer to a company's profit, they are referring to the net income remainder after expenses, or the net profit.
While revenue and profit both refer to the money
a company makes, it is possible for a company to generate revenue but
have a net profit loss. This occurs when debts or expenses outstrip
earnings.
a company makes, it is possible for a company to generate revenue but
have a net profit loss. This occurs when debts or expenses outstrip
earnings.
Hello, my name is Jack Sparrow. I'm a 50 year old self-employed Pirate from the Caribbean.
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