What is the difference between revenue and profit?
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M$5 Answers
Profit is what is left after you subtract the costs of production
So
Profit=Revenue-Costs
So if you sell 10 lemonades for 1 dollar, revenue is 10$
But then you subtract the cost for lemons and sugar 1$
So profit=revenue-cost=10-1=9$
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M$
Profit is the money that your business retains after all expenses have been paid and accounts have been settled. It is usually found at the end of the income statement. Companies usually report different types of profit:
Gross Profit = Revenue - Costs of Goods sold
Operating Profit = Gross profit - Operating Expenses
Profit Before Tax = Operating Profit + Net Interest Income ( Net Interest Income = Interest Income - Interest Expenses)
Net Profit = Profit Before Tax - Tax
The profits are divided by revenue to provide ratios which are better for comparison purposes. The Net Profit Margin for e.g refers to Net Profit/Revenue * 100% and Gross Profit Margin = Gross Profit/Revenue * 100%.
Personal experience with financial statements.
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M$
Profit = Revenue - cost of goods sold (operating profit)
Then from subtracting interest and taxes paid from operating profit you will get the net income or profit.
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M$
Out of those fish you catch, you'll have to throw some back: rent, salaries, overhead, COGS, etc, but some will still be left in your net. AKA "Net Profit." It's what's left when everything's paid for.
That's how I was taught, anyway, from the President and CEO of a a very successful retail chain.
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M$Profit is directly related to products and services. For example, sales minus cost of goods sold (what the business paid)= profit.
Revenue can be sales revenue, revenue collected from interest on investments, etc... It is actual money earned.
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M$
If you can make lemonade for that cheap, I'm in the wrong business :p