Income & Revenue
This query is : Resolved
28 September 2007
turnover, revenue = gross
income, profits = net
income, profits = net
28 September 2007
Take an example:
hope you own a company that produces needles and pins.
The revenue you generate yearly is 120 (this is what your customers pay you for your output, the needles and pins; it is also called turnover). You need to pay 90 for inputs (labor, metal supplies, depretiation of the machinery, premises maintenance, ...). Those 90 are your costs.
That is, your gross income (gross earnings, pre-tax profit) is 30. After paying the income tax, which is 8, you end up with net income (net earnings, after-tax profit) of 22. You can either plough the money back in the business (re-invest) or disburse dividends to yourself and other shareholders - or any combination of both.
Hope this helps (although it is terribly simplified). Please note that the terminology sometimes fluctuates.
hope you own a company that produces needles and pins.
The revenue you generate yearly is 120 (this is what your customers pay you for your output, the needles and pins; it is also called turnover). You need to pay 90 for inputs (labor, metal supplies, depretiation of the machinery, premises maintenance, ...). Those 90 are your costs.
That is, your gross income (gross earnings, pre-tax profit) is 30. After paying the income tax, which is 8, you end up with net income (net earnings, after-tax profit) of 22. You can either plough the money back in the business (re-invest) or disburse dividends to yourself and other shareholders - or any combination of both.
Hope this helps (although it is terribly simplified). Please note that the terminology sometimes fluctuates.
28 September 2007
As discussed on vikipedia:
Revenue is a business term for the amount of money that a company receives
from its activities in a given period, mostly from sales of products
and/or services to customers. It is not to be confused with the terms
"profits" or "net income" which generally mean total revenue less total
expenses in a given period.
Revenue is a business term for the amount of money that a company receives
from its activities in a given period, mostly from sales of products
and/or services to customers. It is not to be confused with the terms
"profits" or "net income" which generally mean total revenue less total
expenses in a given period.
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