Revenue Minus All Expenses Is Called

This figure indicates whether your business is profitable.

Revenue minus all expenses is called. Revenue also known simply as sales does not deduct any costs or expenses associated with operating the business. Operating income is equal to total revenues minus cost of goods sold labor and general expenses. Net profit may have a number of meanings. Other categories include the owner s equity assets liabilities and revenue.

The net profit margin is an expression of the net profit as a percentage of the revenue where the net profit is the revenue minus all expenses. In the double entry bookkeeping system expenses are one of the five main groups where financial transactions are categorized. Gross profit is the total revenue minus the expenses directly related to the production of goods for sale called the cost of goods sold. The net profit margin is an expression of the net profit as a percentage of the revenue where the net profit is the revenue minus all expenses.

4 8 21 contents1 revenue definition 2 revenue examples 3 operating revenue definition 4 operating revenue examples 5 non operating revenue definition 6 non operating revenue examples 7 expenses definition 8 expenses examples. When you are finished with purchases expenses labor costs cogs and all other expenses then you take that net and minus your expenses to ascertain your profit. The formula for net income is simply total revenue minus total expenses. Gross profit refers to sales revenues minus the cost of goods sold.

Revenue is the total amount of income generated by a company. In financial accounting an inflow of money usually from sales or services thru business activities is called as revenue. Derived from gross profit operating profit reflects the. Most people assume that it means the revenues minus all expenses including the costs of goods sold sg a selling general and administrative expenses non operating expenses and in most cases after income tax expense.

Operating income is called earnings before interest and taxes. What is not included in expenses to.