Revenue vs Profit vs Income

We often see different words Revenue, Profit or Income when we read finance related information. Do you know the difference between Revenue, Profit and Income ?

Revenue

Normally revenue is the total amount which is from business sales or services before cutting any expenses; In British English, Revenue is Turnover.

Profit

Compared with Revenue above, we can simply say Profit is Revenue minus total expenses.

However, we have further concepts Gross Profit and Net Profit:

- Gross Profit: If your Revenue comes from sales or services, then Revenue minus the cost of your goods for sell and service (called direct costs), you get Gross profit;

- Net Profit: If we get Gross Profit above, you might have other expenses such as payroll, taxes, devices and tool costs…etc. you cut this part from Gross Profit, you get Net Profit.

Income

Sometimes people think Income is Revenue minus expenses, but sometimes people think Income might be net profile. or, some people think Income just is Revenue. So Income is based on context.