What is the Difference Between Income and Revenue?
🆚 Go to Comparative Table 🆚The difference between income and revenue lies in the costs and expenses associated with running a business. Here is a breakdown of the differences:
- Revenue: Revenue is the total amount of money generated by the sale of goods or services related to a company's main operations, before any costs or expenses are deducted. It is sometimes referred to as "gross sales" or "top line" because it sits at the top of the income statement. Revenue is a good indicator of a company's sales and growth potential.
- Income: Income, also known as net income, is a company's total earnings or profit after all expenses are deducted, including taxes, depreciation, rent, commissions, and production costs. Income is often considered a synonym for profit and is sometimes referred to as the "bottom line" because it appears at the bottom of the income statement. Income represents the money left over after all expenses are accounted for, and it indicates how well a company is managing its costs and expenses.
In summary, revenue represents the total income through goods and services, while income represents the profit left after accounting for all expenses and costs of doing business. Both revenue and income are useful in determining the financial strength of a company, but they are not interchangeable.
Comparative Table: Income vs Revenue
The difference between revenue and income can be summarized in the following table:
| Revenue | Income |
|---|---|
| Revenue is the total amount of income generated by the sale of goods or services, also known as the "top line". | Income, also known as net income or profit, is the earnings or profit left after deducting all expenses, costs, and taxes from total revenue. |
| Revenue is calculated by multiplying the total number of goods or services sold by their price. | Income is calculated by subtracting the costs and expenses of the business from revenue. |
| Revenue is located at the top of the income statement. | Income is located at the bottom of the income statement, also known as the "bottom line". |
In summary, revenue represents the total income generated from sales, while income represents the profit or earnings after accounting for all expenses and costs associated with running the business. Revenue is sometimes referred to as the "top line" because it appears at the top of the income statement, while income is referred to as the "bottom line" because it appears at the bottom of the income statement.
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