Net Revenue And Net Income

The statement then lists all the company s outflows and any additional inflows.

Net revenue and net income. This ratio compares the net income and the revenue. The only difference between net income and revenue is the expenses. In accounting net refers to adjustments made to the original and therefore it can be calculated after adjusting gross revenue with the discounts returned products or any other direct selling expenses. What is net revenue.

Net revenue is the sales of a company from which returns discounts and other items are subtracted from. Income also referred to as net income or net profit is your revenue once all your operating expenses have been subtracted. Net income goes even further than net gross margin because you deduct all other expenses including overhead and taxes. Net revenue and net income are important figures that demonstrate a company s financial stability.

You may hear net sales referred to as top line revenue because this is literally the top line of the typical income statement. Income is referred to as a company s bottom line as it provides a full picture of cash flow the total amount of money being transferred into and out of the business. The formula for net income is simply total revenue minus total expenses. People often refer to net income as the bottom line as it is the last line item on an income statement.

A company s income statement neatly summarizes the relationship between net sales and net income. The return on revenue ror is tool for measuring the profitability performance of a company from year to year. Example let s say that we have the gross revenue of 110 000 with a sales discount of 10 000. Revenue also called sales or turnover is simply the total amount of money received by a company from its business operations sale of goods or services whereas net income also called net profit is the amount of money left after all expenses such as cost of goods sold operating expenses loan interests depreciation.