Income Vs Profit Vs Earnings

The term earnings is most commonly used when discussing the bottom line of a company s income statement.

Income vs profit vs earnings. When investors refer to a. The earnings figure is listed as net income on the income statement. The earnings figure is listed as net income on the income statement. Income is termed as net earning also.

Earnings are the profit a company has earned for a period of time usually a quarter or fiscal year. Profit simply means revenue that remains after expenses. Net income is the same as the profit of a business or its earnings for all of these terms profit net income or earnings we are talking about a net amount including both the income revenue of the business and deductions to that income. Revenue is divided into operating and non operating revenue profit is classified as gross and net profit and income can be classified as earned and unearned income.

In simple terms revenue is the income a business generates when it provides a service or a product to a consumer. Revenue is the top line of the income statement whereas the profit is the bottom line. Earnings on the other hand are the inflow of money after all the expenses i e profit from a business in their daily operations. Net income is a specific figure the renowned bottom line of an 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. Both terms deal with the positive flow of cash. Without any deductions while profit and income are derived after deductions of expenses and taxes. Income shows the amount earned in any financial year but profit is the positive amount which is left from the income post deduction of all kinds of expenses overheads taxes or interest if any.

It is the amount earned by a business from their day to day activities. Revenue is the gross amount i e. In accounting the term profit and income can be used interchangeably.