Net Income vs. Net Revenue: What’s the Difference?

Net income and net revenue are two important financial terms used to assess the performance of a business. While they sound similar, they have different meanings and calculations.

Net revenue, also known as top-line revenue, refers to the total amount of money a company earns from sales of goods or services during a given period of time. It is calculated by subtracting any discounts, returns, or allowances from the total revenue.

On the other hand, net income, also known as bottom-line profit, refers to the amount of money a company has left after deducting all of its expenses from its revenue. This includes expenses such as cost of goods sold, operating expenses, interest payments, taxes, and any other costs incurred during the period. Net income is what remains as profit after all the expenses have been paid.

In summary, net revenue represents the total amount of money a company earns from its sales, while net income represents the profit the company earns after all its expenses have been paid.