What Is Revenue Minus Expenses Called

Therefore when a company is said to have top line growth the company s revenue is growing.

What is revenue minus expenses called. Your cost of goods sold cogs is how much money you spend directly making your products. Gross profit is the total revenue minus the expenses directly related to the production of goods for sale called the cost of goods sold. Net income equal to revenues minus expenses. Revenue is also called net sales which is revenue minus any returns of purchased merchandise.

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. The expenses the result will be minus that is called loss e g. 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. Gross profit is your company s profit before subtracting expenses.

A positive number indicates that you make more than you spend and therefore are able to save money. Gross profit is your business s revenue minus the cost of goods sold. In financial accounting an inflow of money usually from sales or services thru business activities is called as revenue. Loss or gain this number is total income minus total expenses and indicates your loss or gain.

But your business s other expenses are not included in your cogs. In the double entry bookkeeping system expenses are one of the five main groups where financial transactions are categorized. Also sometimes called a net income statement or a statement of earnings the income statement is one of the three most important financial statements in financial accounting along with the balance sheet and the cash flow statement or statement of cash flows. The profit margin ratio compares profit to sales and tells you how well the company is handling its finances overall.

The profit margin is a ratio of a company s profit sales minus all expenses divided by its revenue. Income is the amount. Derived from gross profit operating profit reflects the. It shows your revenue minus your expenses and losses.