Net Revenue Vs Operating Income

The company s total revenue or total net sales was the same.

Net revenue vs operating income. But what if customers returned 20 of those products. Operating income is located further down the. That gives you your operating income. If you want to evaluate a business s performance including your own this is the line to pay close attention too.

It gives you a better idea of your profitability than the net or gross revenue. Operating income is revenue less any operating expenses while net income is operating income less any other non operating expenses such as interest and taxes. The key difference between operating income and net income is that operating income refers to the income earned by a business organization during the period under consideration from its principal revenue generating activities and does not consider non operating income and non operating expenses whereas net income refers to earnings of the business which is earned during the period after considering all the expenses incurred by the company during that period. The key difference between operating income and net income is that while operating income is the income caused by the conducting business operations net income is the profit left after considering all the expenditure incurred.

The formula is a little more complicated. From gross income you subtract operating expenses such as sales administrative rent and depreciation costs. Net revenue or net sales is the money you made from selling goods or services for the month quarter or. Net income operating income interest expense taxes.

Hence the net income here will be 133 20 and that will be your net income. Revenue refers to the sum of money which the company generates from doing the business in the normal course of operations from its customers whereas net income refers to the income earned by the company or the income left over in the company after deducting all the expenses of the period from the net revenue. Your net revenue or net sales is the total amount of income you earn from business operations minus any adjustments such as accounting for returns refunds and discounts. Income also referred to as net income or net profit is your revenue once all your operating expenses have been subtracted.

Your revenue for the month would be 50 000. The net income is a more accurate figure of what your profitability of your business is. Operating income and net income are two essentially calculated profits in the income statement. Say your company had a good month and sold 500 products at 100 a piece.

Income is referred to as a company s bottom line as it provides a full picture of cash flow the total amount of money being transferred into and out of the business.