Income Vs Net Profit

Net income and net profit are two terms frequently used by accountants and business owners alike.

Income vs net profit. Operating profit is the remaining income of the company after paying off operating expenses and net profit is the remaining income of the company after paying all costs incurred by the company which includes all expenses tax and interest. While net income is synonymous with a specific figure profit conversely can refer to a number of figures. Online bookkeeping tax benefit is a broadly encompassing term that refers to some type of savings for a taxpayer. The blueprint explains each term and clarifies if there is a difference between them.

Conclusion typically both the terms are used synonymously but there is only a slight difference between net profit and net income. Profit is realized after reducing the expenses from the revenue and the net income is further realized after reducing other expenses like preference shares and dividends. Profit are calculated from revenue. Net income is used to calculate earnings per share for equity shareholders while the net profit is used to show the profitability position of the company.

Profit is the amount which is left over after paying for expenses such as raw materials salaries tax interest or other overheads from the income in the firm but income is the amount received from business activities whether from direct or indirect sources. When making period to period comparisons it s desirable to remove extraordinary non recurring revenues and expenses. Profit simply means revenue that remains after expenses and corporate accountants. If you have a small businesses net income is your business income the revenue for selling products or services minus your deductible expenses.

Net income is equal to sales revenues minus all expenses including depreciation interest and income taxes. All three terms mean the same thing the difference between the gross income of the business and all of the expenses of a business including taxes depreciation and interest. Net income is the same as the profit of a business or its earnings. However it is important to understand different components that are included in each of these concepts since both provide various indications the key difference between net income and net profit is that net income is the funds available for shareholders after tax while net profit is the actual total profit earned by the company.