Revenue Is For Profit

Revenue sometimes companies and even self employed entrepreneurs make the fatal mistake of equating sales revenue with cash flow.

Revenue is for profit. To generate profit you have to generate enough revenue to offset your expenses and still have income leftover. Different types of profit. Gross profit is the cost of goods sold cogs subtracted from revenue. Revenue implies the money received by the company from its day to day operations alongwith the non operating activities.

Cogs consists of costs directly tied to producing whatever good or service. Profit is what is left after deduction of all expenses from revenue. In a business update food empire reported net profit after tax of us 6 3 million for the three months ended sept 30 down from us 7 8 million in the year ago period. Still the total revenue of 128 000 is applied toward the profit.

Gross profit is your total sales minus the cost of goods sold. Revenue is the total income generated by a business from the sale of goods services whereas profit is the surplus which remains after deducting all expenses and taxes associated. Gross profit net profit etc. Revenue isn t dependent on profit.

Profit cannot exist if there s no revenue. From a broader perspective profit revenue expenses. Profit is a subset of revenue. Revenue for the quarter fell 8 5 per cent year on year to us 70 3 million from us 76 8 million.

Profits can be calculated at various levels e g. Total revenue is interdependent of profit and will exist since it is the reason for a business being established. Revenue is the total amount of income generated by a company. Profit is the result of deducting expenses from the revenue.

Gross profit operating profit and net profit. Revenue profit and income are three terms which sound same to a layman although in business terminology there is a huge difference between them. Rather revenue can exist without it for example if a start up has more expenses than revenue then there would be no profit but revenue would exist. There are different forms of profit and revenue.