What is the difference between revenue and income? The difference between income, profit and revenue. Financial parameters: profit and revenue

Revenue vs profit, what's the difference? In this article in simple terms Let's talk about what each of these concepts is. And what is the difference between them - we will show with an example.

Revenue and profit are important economic concepts. They are among key indicators company activities. To understand how they differ, you need to know how revenue and profit are formed.

What is revenue

Let's first understand what income is. In the economic literature, revenue is the money received from the sale of goods, works or services. Economists calculate this indicator for the organization as a whole, for activities, divisions, types of products, etc.

In accounting, the concept of revenue is disclosed in PBU 9/99. For an accountant, revenue is also income from the sale of goods, the performance of work or the provision of services (clause 5 of PBU 9/99). And it consists of proceeds from ordinary activities:

• cash receipts,
• Receipts of property having a monetary value,
• The amount of accounts receivable.

Unlike economists, an accountant considers not only cash receipts to be revenue. The proceeds may be the receipt of other property, as well as the debts of buyers.

Example

Sfera LLC applies the simplified taxation system and works without VAT. In July 2019, Sfera LLC sold goods to customers for a total of RUB 800,000. Behind goods sold payments from buyers in the amount of 650,000 rubles were received to the current account. Goods worth 150,000 rubles. were implemented with deferred payment, payment for them will be received in August. The accounting revenue of Sfera LLC in July 2019 amounted to 800,000 rubles. Despite the fact that 150,000 rubles. not yet paid.

In the example, we did not accidentally mention VAT. According to clause 3, clause 6 of PBU 9/99, when calculating revenue, taxes, fees and some other amounts are excluded:

• VAT, excises, export duties, other obligatory payments,
• Amounts in favor of the committent, principal, etc. under commission and agency agreements,
• Amounts of prepayment and advance payments,
• Amounts received as a deposit or pledge,
• The amount of debt repayment under credit or loan agreements.

And how in accounting revenue correlates with the income of the company? According to paragraph 4 of PBU 9/99, the company's income is all receipts that lead to an increase in the company's capital. They are divided into:

1. Income from ordinary activities is revenue,
2. Other supply.

That is, revenue is one of the types of company income. The statement of financial results helps to understand this. It is in it that the income of the enterprise is reflected.

Income from ordinary activities, that is, revenue, is indicated in line 2110 of the report. And other income is indicated in other lines:

• Income from participation in other organizations - line 2310,
• Interest receivable - line 2320,
• Other income - 2340.

What is meant by other income? For example, this is income from the rental of temporarily unused property. Or fines and penalties for non-fulfillment of contractual obligations by counterparties.

What is profit

Now let's see what profit is. Profit is the difference between receipts and expenditures aimed at obtaining these receipts. That is, in general view profit is the difference between all the income and expenses of the organization. Moreover, the difference must be positive. If expenses are greater than income, then the difference is negative - this is a loss.

Profit and revenue have two similarities:

• Both revenue and profit are part of the company's revenues,
• When calculating both indicators, the amounts are taken minus VAT, excises and other obligatory payments.

What income and what expenses to take for calculation depends on the type of profit that needs to be determined:

Type of profit	Formula for calculation	Calculation according to the income statement
	Revenue - cost of sales	Line 2110 - line 2120
Sales profit	Gross Profit - Selling Expenses - Management Expenses	Line 2100 - line 2210 - line 2220
Profit before tax	Profit from sales + income from participation in other organizations + interest receivable + other income - interest payable - other expenses	Line 2200 + line 2310 + line 2320 - line 2330 + line 2340 - line 2350
Net profit	Profit before tax - income tax	Line 2300 - line 2410

What is the difference between revenue and profit

Now that we have revealed the concepts of income, revenue and profit, we can say how revenue differs from profit:

• Revenue is all the money that a company receives from ordinary activities: the sale of goods, the performance of work and the provision of services,
• Income is revenue plus other cash receipts. From income, the company pays its expenses and transfers taxes,
• Profit is what remains of income after paying all expenses and taxes. The owners of the company can dispose of this money at their discretion. For example, send it to the development of the organization or take it in the form of dividends.

To understand the difference between revenue and profit, the table will help:

Criterion	Revenue	Profit
	Money from the sale of goods, works and services	Money from sales minus expenses and taxes
Indicator	Is an indicator of the volume of sales	Is an financial result company activities
	Only income is taken into account, excluding expenses.	Accounting for income and expenses
Meaning	Can only be a positive number	Can be positive, zero and negative (loss)
	One indicator is calculated	There are several types: gross, from sales, before tax, net

Revenue and profit, what is the difference: an example

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Let's use an example to show the difference between revenue and profit.

Example

OOO "Omega" is a manufacturer of production equipment. For the third quarter of 2019, the company received the following results (to simplify the example, we do not take into account VAT):

• Products sold for a total amount of 8,500 thousand rubles,
• Cost price products sold amounted to 5,700 thousand rubles,
• Commercial expenses amount to 850 thousand rubles,
• Administrative expenses - 1,120 thousand rubles.

Also, during the quarter, Omega LLC leased idle production room o received rent in the amount of 800 thousand rubles.

Determine revenue, income and profit:

• The company's revenue amounted to 8,500,000 rubles,
• Income amounted to 9,300,000 rubles. (8,500 thousand rubles + 800 thousand rubles),
• Profit before tax is 1,630,000 rubles. (9,300 thousand rubles - 5,700 thousand rubles - 850 thousand rubles - 1,120 thousand rubles),
• Income tax is 326,000 rubles. (1,630,000 rubles * 20%),
• Net profit is 1,304,000 rubles. (1,630,000 rubles - 326,000 rubles).

Overview of the latest changes in taxes, contributions and wages

You have to restructure your work due to numerous amendments to the Tax Code. They affected all major taxes, including income tax, VAT and personal income tax.

Financial relations permeate the life of society, and become successful person today is impossible without understanding the essence of the most important economic categories. The concepts of "revenue" and "income" are often confused even by novice businessmen, since in the mass consciousness they are synonymous. In fact, it is very important to understand the difference between them, which will allow you to analyze any economic information more deeply.

Revenue- amount Money received from the sale of goods or services. It can also be called "dirty" money, since costs are not taken into account when calculating the value. Revenue is always either positive or at zero, but never negative. It is determined either on a cash basis (with actual receipt of funds), or on an accrual basis (at the time of shipment of goods or provision of services, including with deferred payment).

Income- funds received by the subject of economic legal relations for a certain period of time. They are formed at the expense of the main activity of the legal or individual, as well as with the help of attracted investments. The concept of "income" largely intersects with the concept of "profit" and is defined by "pure money": revenue minus expenses. This is a purely economic category that reflects the current financial condition of a legal entity or individual.

Comparison

So, revenue is a positive value, which can be equal to zero only in rare cases. Receipts are added together, forming a certain amount. Income can be negative when the revenue received does not cover the cost of obtaining it. Revenue is generated from the main activity of the enterprise: the production (sale) of products or the provision of services. Income can be received at the expense of the company's assets (rental of space, deposit, attraction of investments), as well as at the expense of the main activity (sale of goods and services).

At the same time, revenue is an attribute of the subject leading active work in the economic sector. A person who, for one reason or another, is not engaged in socially useful activities (student, disabled person, pensioner, unemployed) can have income. These funds are generally not subject to income tax. In rare cases, revenue may equal profit. This happens in cases where, upon receipt of it, there is no expenditure part (provision of a certain list of services). However, most often it is revenue that exceeds income in terms of volume.

Findings site

1. Formation. The organization's revenue appears as a result of the sale of goods and services, and income is also due to the sale of shares, attracting investments, receiving interest on funds placed on a deposit account.
2. Way of origin. Revenue can only be held by an individual or legal entity leading economic activity. Income can be from the unemployed and the student in the form of scholarships, financial assistance, benefits.
3. Calculus. Revenue is cash received from the sale of goods and services. Expenses are subtracted from revenue to calculate income.
4. Meaning. Revenue is either zero or positive. Income can be negative if the cost of obtaining revenue exceeds the profit received.
5. Ratio. Revenue is always greater than income, and only in rare cases can they be equal.

One of the basic concepts used in economics and business is revenue. It is with this concept that the activities of most enterprises are associated. Depending on the proceeds received, an entrepreneur can assess the demand for a particular product or service, resolve issues related to the production and purchase of goods in his favor. It is believed that it is the size of the profit that determines the success of the enterprise.

Basic definition

It would seem that revenue is the amount received in the course of the sale of goods. But this is far from being the case, since it depends on a number of nuances and characteristics. Previously, revenue was attributed to one of, but now there are disputes around this issue. Today it is considered income from the main activities of the company, but at the same time, other areas can be profitable.

The basic definition says: revenue is the total amount of money received for a certain period of activity from the sale or provision of services. It can take both a positive value and be equal to zero, but it will never take a negative value.

Receipt of revenue is the final stage in the work of any commercial organization. It is the main overall indicator of the performance of a company or firm. This indicator is planned in the first place, and on its basis the price of the product and its circulation are set. On the basis of revenue, all subsequent types of profit and income are calculated, conclusions are drawn about the demand for a particular product.

In the absence of profit, the company inevitably suffers losses, which ultimately leads to its ruin and closure.

Calculation methods

There are two main methods for calculating revenue. At the same time, a different concept of revenue is invested in each of them:

• AT cash basis this concept means the money received by the seller of the goods from their sale. In fact, this is the amount of payment that the seller received in cash or through a non-cash payment. If the goods are released with a delay, the proceeds are not fixed until the money arrives at the seller's or seller's settlement account. In this case, all advances received are equated to revenue.
• Revenue determination method by charge or shipment . In it, even those funds that were received in cash, and will also be paid through credit or deferred payment, are considered revenue. This method often used in large companies.

Types of revenue

Revenue from the sale of products and services - funds received for the products or services shipped to customers. This type of income is divided into two types:

1. , which takes into account all the money received for a product or service. In the case of barter payment, the full value of the exchange agreement. This amount includes not only taxes, but also various fees and duties, which are then paid to the state. The second name of this type of revenue that can be found is net revenue.
2. Pure is the difference between gross revenue, taxes and excises. It is recorded in the profit and loss statements of the enterprise. Net revenue is also called gross revenue. It is she who forms the main income of the enterprise.

The difference between basic concepts and definitions in trade

In actions related to the sale of certain things and products, employees have to operate with such concepts as revenue, income and profit. But you should understand the difference between each of these terms.

Often, net revenue is correlated with the concept of income. But income is a broader concept. Thus, income is considered to be an increase in economic benefits from the receipt of various funds and, as a result, an increase in the capital of the organization. But income can have several sources, not only revenue, but also payment of fines, sanctions, interest from the bank. All this generates profit.

Money for the purchase of goods, taxes, payment of rent for premises, for sellers - expenses. If you subtract this amount from the income received from the sale of goods and services, you can make a profit.

Naturally, revenue significantly affects the income and profit of the enterprise and is one of its main components, but it is fundamentally wrong to equate revenue with these two concepts.

Revenue components

Revenue consists of two main components:

• purchase price , that is, the cost at which the goods were purchased for sale or the material for its manufacture;
• added value , that is, the amount that the seller adds to the purchase price in order to make a profit. Often this amount is a percentage of the purchase price of the product.

Thus, if the cost of goods is subtracted from the revenue, then you can get the amount of income received by the company in the course of its activities.

main sources

To date, revenue can be received from:

• core business – sale of products, performance of works or provision of services. So, for a store it will be the sale of goods, for a law firm it will be the provision of legal services;
• investment activity , which includes work with company shares, securities and even company assets that are not involved in the turnover. For example, a large corporation may sell part of its shares in order to obtain investment;
• financial activity of the enterprise . For example, the owner of an enterprise invests money in a particular project in order to make a profit, puts money on a deposit in a bank, and others.

If you add up the funds received in these three areas, then in the end you can get the total profit of the enterprise.

For example, profit from core activities is 920,789 rubles per month, investment activities - 34,000 rubles, financial activities - 265,000, therefore, the total profit for the month will be: 920,789 + 34,000 + 265,000 \u003d 1,219,789 rubles.

In accounting, under this concept, funds received from the main activities of the company are accepted, while the rest of the funds are usually called “other income” or “interest income”.

Main functions

The main function that revenue performs is the reimbursement of the funds spent by the firm on the purchase or production of goods. Its timely receipt on the company's accounts ensures not only the stability of its work, but also the continuity of trade and the company's activities.

With the help of the received proceeds, the invoices of suppliers, both goods and materials, wages, taxes are paid. In addition, the proceeds received can be used to purchase a new product or material, expand the company's activities.

If the revenue arrives late, the company's activities incur losses, as its profit decreases, penalties may be imposed or contractual obligations associated with the production of goods, payment of certain bills may be violated.

Revenue calculation

For calculations, fairly simple formulas are used. It is enough to know the volume of products sold for a certain period of time and the unit cost, then multiply them. Further, the obtained values ​​for each group of goods are summarized. It should be noted that the funds received during the operation of the enterprise are not included in the revenue.

Looks formula in the following way

TR = P * Q, where

TR – revenue, rub.;

P – price, rub.;

Q - sales volume, unit/pc.

For example, let's calculate the revenue of the Vesna store from the following products:

• Tea - sold 23 packages, the cost of each - 105 rubles.
• Sugar - 3 kg, 40 rubles each.
• Lemon - 1 kg, cost - 200 rubles.
• The revenue for tea was - 23*105 = 2415;
• Revenue for sugar - 3 * 40 \u003d 120;
• Revenue per lemon - 1*200=200.

The total revenue of the store for this group of goods amounted to 2415 + 120 + 200 = 2735 rubles.

If the product was first sold at the same price, and then its value increased, then the revenue is calculated for each product depending on its value, and then added up.

For example, in early January, 120 packs of tea were brought to the Solnyshko store for 105 rubles each, and in February another 76, but with a cost of 110 rubles. At the same time, the store still has 20 packs of tea at the old cost.

During the month, the remaining 20 packs and 34 packs from the new batch were sold. Thus, the proceeds from the sale of tea in February will be: (20 * 105) + (34 * 110) \u003d 2,100 + 3,740 \u003d 5,840 rubles.

The data obtained in the course of calculations are considered information for internal use and are not included in the financial statements.

However, once a quarter or a year, these indicators are calculated by an accountant and recorded in the Profit and Loss Statement. In this case, the amount of revenue is indicated without indirect taxes and VAT (see also). Besides , in some cases, the amount received during the sale may not be wholly owned by the company. For example, when selling commission items, the seller receives revenue from the buyer, the bulk of which belongs to the owner of the goods.

For example, the following items were accepted for sale at the Solnyshko thrift store with the proviso that the people who provided them or the consignors would receive the following amounts:

• Children's chair - 450 rubles.
• Arena - 890 rubles.
• Kangaroo - 500 rubles.

The sellers of the store also made a markup on the goods in the amount of 20%, that is, the total cost things amounted to: 540, 1068 and 600 rubles, respectively. After the sale of these things, the profit of the store "Solnyshko" amounted to:

(540 + 1068 + 600) - (450 + 890 + 500) \u003d 2 208 - 1840 \u003d 368 rubles. The remaining amount, according to the previously drawn up agreement, will be received by the committents.

The reports prepared by the accountant are submitted to the management of the company. On their basis, conclusions are drawn about which goods are in great demand, and which are less. Therefore, it helps to form the volume of purchases of a particular product.

Video: Revenue and profit

From the video lesson you will learn what revenue is and how to calculate its main types: total, average and marginal. In addition, the lesson talks about profit, the main factors of its formation and its impact on the development of the company.

Learning is the funds received in the course of the sale of goods or services. Thanks to the revenue, you can draw a conclusion about the work of the enterprise, adjust its activities. A delay in the receipt of revenue leads to losses for the enterprise, and its absence leads to its closure.

Every entrepreneur should know what is the income and profit of the enterprise, as well as how they differ from revenue.

Profit and income are the main financial indicators economic activity various organizations, regardless of the form of ownership. They can give an idea of ​​the overall profitability of the enterprise.

The costs of social and industrial development of the firm must be financed from profits. The source of financing of the state budget is the corporate income tax.

What is revenue (turnover)

Proceeds - funds received (proceeded) by an enterprise, firm, entrepreneur from the sale of goods and services, sales proceeds. That is, this is the entire amount of money that turned out after the sale of the goods.

Example of revenue (turnover), Petya sold 100 phones for 10,000 rubles. The revenue will be 100 * 10,000 = 1,000,000 rubles.

Revenue from the sale of certain products is divided into two main types - net and gross:

• Under Net Revenue means the amount of money after all kinds of deductions, taxes, discounts and the cost of the returned goods.
• Gross revenue- is the total amount of cash receipts after the sale of certain products or services.

Income \u003d is revenue (turnover) - the cost price (or purchase price) of goods or services. Taxes are also deducted from this amount. Material costs are the funds that have been spent on the purchase of products or necessary equipment. These costs include a variety of deductions. social character. extradition wages has nothing to do with this category.

Income Example, let's say the cost of Petya's phones is 5000 rubles. Only 100 pieces, which he sold for 10,000 rubles each. Then income \u003d 100 * (10,000 - 5,000) \u003d 500,000 rubles.

Labor costs and profits are the main components of the income of a particular enterprise. Market value goods and general market conditions have a direct impact on the level of income of the organization. Possible income from individuals and legal entities do not belong to the income side of the company.

If the income is subject to tax payments, then after their deduction there remains an amount that includes the following elements:

• insurance and investment income. These are the amounts received in the course of investment activities and the cost of insurance premiums.
• Consumer funds whose activities require spending on the social sphere.

Income can be marginal, total and average.

• marginal revenue is the difference by which the total income of the organization changes after the sale of a certain unit of goods. Demonstrates the overall payback of the company.
• Total income- this is the final result of the economic activity of the company, the difference between the cost of goods and production costs.
• Average income received after the sale of one unit of goods. It is equal to the price of a particular sold product.

Experts also distinguish the concept of other income. These include a variety of penalties, interest for placing a deposit.

What is profit

Profit is the difference between costs and revenues, where the latter are an indicator of financial activity.

Profit Example, Petya's income from the sale of phones amounted to 500,000 rubles. But you still need to pay taxes, pay the salary of the manager, pay the rent, etc.

Maximizing profits has always been one of the main goals successful businessman. It is considered the most important estimated generalizing indicator of the activity of a particular company.

This concept includes the following main components:

• Profit from the sale of property and the sale of material assets.
• Funds that were received from additional (non-core) activities of the organization. This refers to securities, dividends, funds from the rental of real estate.
• The difference between the funds that were received from the sale of a certain product and its present value.

If it was found that the profit of the enterprise is zero, the costs can be considered the result of such economic activity. The limiting indicator of this concept can be obtained by selling an additional copy of the product.

There are several main functions of the profit of the enterprise:

• Provides funds for the development of the company.
• Forms taxes on the profits of commercial enterprises.
• Shows the final economic result activities of a conventional enterprise.

For productive profit management, experts recommend taking into account its marginal indicator, which you need to focus on. Some heads of firms actively practice lowering the price policy. But this should not be exacerbated. At in great demand on goods, the profitability of the enterprise as a whole can drop catastrophically.

Experts advise offering their customers inexpensive analogues of goods and services that are considered the most in demand. Such measures will help maintain the attractiveness of products and the normal price category.

This financial indicator has several classifications. As a result of economic activity:

• Minimum allowable and maximum possible, which happens when minimal cost and maximum profit.
• Regulatory- This is the standard minimum indicator provided by the enterprise.
• under-received- a loss that was formed due to the fact that one of the participants in the transaction violated its obligations.

Profits may or may not be taxed. It is differentiated into economic and accounting, depending on the costs. The first is the difference between accounting profit and additional, forced expenses.

As for the second option, it is positioned as the difference between the costs incurred and the income of the enterprise.

Gross profit is the difference between the total income of a particular organization and the amount of costs. Net income can be calculated by subtracting all related expenses from gross income.

About EBIT and EBITDA earnings

These are two more types of profit, which should be separately emphasized.

EBIT profit is positioned as an intermediate value between gross and net indicators. Some believe that this is operating profit and are mistaken. This concept can also include non-operating profit. The amount of EBIT profit can be calculated based on the sum of profit and loss before taxes. This indicator must be positive.

The value of profit directly depends on the depreciation rate and how it is calculated.

EBITDA is earnings before interest, depreciation and taxes, showing only cash inflows. This analytical indicator is calculated on the basis of the financial statements of an organization and is the main indicator of how profitable the company's activities are as a whole, regardless of various debts and depreciation methods.

Having determined EBITDA, it is possible to calculate the organization's debt burden. To do this, the debt indicators are divided by the nominal profit.

The indicated values ​​of EBIT and EBITDA are reduced to one - "reduction to a common denominator" economic indicators organizations from different countries. The tax systems of different states are not similar to each other. This means that income tax rates will also not be equivalent. The introduction of EBIT and EBITDA profits into accounting practice makes it possible to correct this situation.