For a business, income refers to net profit i.e. What continues to be after expenses and taxes room subtracted from revenue. Revenue is the complete amount the money the company receives native its customers for its products and services. Because that individuals, however, "income" usually refers come the full wages, salaries, tips, rents, attention or dividend got for a certain time period.
You are watching: What is the difference between revenue and expenses
Income = Revenue − Expenses
When revenue is represented as a portion of revenue, it"s called profit margin.
|Net profit, or money that stays after costs are subtracted indigenous revenue.||Proceeds native the sales the products and services come customers, as well as other tasks like investment.|
|Bottom line||Top line|
Consider a shirt manufacturing business. In 2011, the agency sells 1 million shirts come retailers, that pay lock $10 per shirt. Therefore the total revenue for the service is $10 million. In the course of law business, the company incurs various expenses. E.g. Raw material for shirt (cloth, buttons etc.), purchase and upkeep of machinery, personnel costs and also other capital and operational expenses. Let"s say the full expenses in 2011 for this company were $8 million. For this reason the income, or network profit, because that this company in 2011 is $2 million. The profit margin is 20%.
See more: What Is The Violin Stick Called, The Anatomy Of A Violin
Top line and Bottom line in a financial Statement
In a company"s financial statement (or Profit and also Loss declare or income statement), the first line -- likewise called the top line -- is revenue. Sometimes this revenue is damaged out through business task to administer investors an ext transparency into where the revenue is acquired from. The cost of items sold is detailed next, followed by other prices such together selling, general and administrative expenses, depreciation, interest paid and also taxes. After every these prices are subtracted indigenous Revenue, the last heat on the declare -- the bottom line -- is the net income (or merely "income") of the business.