Income Vs Profit Meaning

While revenue includes the gross earning from primary operations without any deductions profit is the resultant income after accounting for expenses expenditures taxes and additional income and costs in the revenue.

Income vs profit meaning. Revenue is shown in the first line of the income statement. The key difference between profit vs income is that profit of the business refers to the amount realized by the company after deducting the expenses from total amount of revenue earned during an accounting period whereas income refers to the amount left as the earning in the organization after deducting other expenses such as dividends etc from the profit amount. The pure profit earned by a company in a particular accounting year is known as net profit. For example the income statement was commonly referred to as the profit and loss p l statement.

In general profit is the reward for the risk taken by the entrepreneur in the business. Profit is the net amount left positive after deducting all costs expenses and taxes from the revenue. Some people intend for the terms income and profit to have the same meaning. 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.

The income arose after deducting preference dividend from net profit is the net income. To aid in understanding these terms the word net is often added. Net income is the same as the profit of a business or its earnings. Profit simply means revenue that remains after expenses and corporate accountants.

Revenue is the top line of the income statement whereas the profit is the bottom line. 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. Below are the main differences between profit vs income 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.