What Is Revenue Less Expenses

It is possible to reduce expenses by making cuts in one or more areas.

What is revenue less expenses. Revenue is often referred to as the top line because it sits at the top of the income statement. Cash basis accounting is less accurate than accrual accounting in the short term. When a business uses the accrual basis accounting method the revenue is counted as soon as an invoice is entered into the accounting system. Oer can also be used to gauge the difference in operating costs between two properties.

By rosemarie nelson march 5 2015. Revenue does not necessarily mean cash received. Other names for net income are profit net profit and the bottom line income is realized differently depending on the accounting method used. Sales revenue is the income received by a company from its sales of goods or the provision of services.

The revenue number is the income a company generates before any expenses are taken out. And loss is when the expenses are greater than revenue means that the revenue is less and the. In accounting the terms sales and revenue can be and often are used interchangeably to mean the same thing. But when walmart makes money by selling an old delivery truck that amount is called a gain not revenue because walmart s not in the business of selling trucks at least not yet the same reasoning applies to the difference between expenses and losses expenses are decreases in a firm s assets or increases in the firm s liabilities from what they are in the business to do.

Profit is the balance when you pay all of the expenses the remainder that is left is the profit. For instance if a company owns two similar plants in michigan with similar outputs and one s oer is 15 more than the other management should investigate the reasons why. Expenses also will often fluctuate during any period of time but are more under the direct control of a company. A low oer means less money from income is being spent on operating expenses.

Net income is revenue less expenses. Net sales gross sales customer discounts returns allowances gross profit net sales cost of goods sold operating profit gross profit total operating expenses net profit operating profit taxes interest net profi.