Net Income Vs Operating Revenue
The key difference between operating income and net income is that while operating income is the income caused by the conducting business operations net income is the profit left after considering all the expenditure incurred.
Net income vs operating revenue. Net sales refer to revenue minus returned merchandise which is common for retailers. If net sales are high but operating income is low it may be time to trim the budget. Operating income and net income are two essentially calculated profits in the income statement. Your management department may make decisions on whether to continue selling a product based on the gross margin of the good.
Let s quickly dive deeper into these two terms before we get started. So while revenue shows the total amount of money coming in income shows the total amount coming in and out. Operating income was 116 million and included all the expenses. Operating income is located further down the.
Although net revenue and gross margin are useful internal figures external parties care most about net income. Revenue is the total amount of sales generated by a company while income refers to the net profit earned minus expenses. The company s total revenue or total net sales was the same net sales amount to revenue minus returned merchandise which is common for retailers. The difference between net revenue and operating income shows how much expenses take out of your revenue stream.
Revenue total net sales was 12 5 billion. The first step is to calculate net revenue gross revenue sales discount 110 000 10 000 100 000.