Revenue Vs Profit Vs Earnings

Earnings and net income are commonly used as synonyms.

Revenue vs profit vs earnings. Calculating profit allows a company to realize how much it has earned compared to its costs to produce the sales that brought in the revenue. So earning a profit means that youve made more money than it costs to deliver the goods or services. In our revenue example above the single contract was worth 50000.

Earnings and profit are related but they are not exactly the same. In short we can say profit is the revenue that is left after deducting the expenses. Usually earnings are the income a business earns which may be calculated after subtracting the costs of making purchasing or providing the items or services it sells.

Profit Revenue Other income Total expenses. Revenue is the total amount of income generated by the sale of goods or services related to the companys primary operations. Subscribe to our channel to get new updated videos.

In many situations turnover and revenue describe such similar ideas that they can be used interchangeably without problems. Net profit represents the profit in dollar terms after incurring the direct costs associated with producing the goods and services sold by the business entity all the operating expenses including the depreciation and amortization incurred during the operating cycle other expenses interest and taxes. Earnings on the other hand represents the profit a company has earned.

Revenue is the total amount of money a company generates from its core operations. While revenue includes the gross earning from primary operations without any deductions profit is the resultant income after accounting for expenses expenditures taxes and additional income and costs in the revenue. Net income also known as net profit is a.

Profit is the amount left Positive post deduction of all kinds of costs expenses taxes etc. At first glance the premise of turnover vs revenue seems simple. The key difference between Revenue and Earnings is that revenue refers to the amount generated by any business entity by selling their goods or by providing their services during the normal course of its operations before deducting the expenses whereas the earnings refers to the earnings generated by any business entity after deducting the cost and expenses incurred during the period.