Revenue And Net Income Difference

Net income on the other hand is the profit that is left after subtracting all the expenses cost of goods sold expenses depreciation interest and taxes etc from revenue.

Revenue and net income difference. However net income will tell you a slightly different picture how. Revenue is also called top line in financial context. The basic difference between revenue and net income could be the fact that the former is the total amount of money actually earned by an entity during a particular period whereas the latter is the actual total earnings that are left with a company after making all the necessary adjustments like depreciation interest cost of doing business. As a business gross income can indicate the revenue generated year over year and give a perspective on how your business is doing.

From the total revenue generated by a company. Revenue generated by a company is the total income generated by the sales of goods and services produced by a company. The net revenue is what a company earns as a whole and the net income that the company is left with after bearing all the expenses and adding other sources of income. From a financial standpoint the term gross means a beginning amount before any expenses deductions or withholdings are subtracted.

The formula for net income is simply total revenue minus total expenses. Example let s say that we have the gross revenue of 110 000 with a sales discount of 10 000. Let s quickly dive deeper into these two terms before we get started. Gross income is the total amount of income your company earns during the year.

Revenue is also referred to as the top line because it comes first in the financial statement of the company. Net income goes even further than net gross margin because you deduct all other expenses including overhead and taxes. Revenue refers to the total amount of money that is generated by the sales of goods and services from the company s operations. The key to making sense of net income and net revenue is understanding the difference between net and gross.

Gross income and net income can provide a different perspective and affect goals and actions you may take personally or as a business owner. Revenue is the total amount of sales generated by a company while income refers to the net profit earned minus expenses. People often refer to net income as the bottom line as it is the last line item on an income statement.