Income can sometimes be used to mean revenue, or it can also be used to refer to net income, which is revenue less operating expenses (the “bottom line”). Learn more in CFI’s Free Accounting Courses. Let’s take a closer look at what revenue can mean by looking at examples of the different types that frequently appear in finance and accounting.
How is revenue calculated?
Revenue is the total amount of money generated from a business's primary operations. It is also called gross sales or "the top line" because it is the first line on an income statement. It is calculated by multiplying a company's average sales price by the number of units sold.
What is the difference between revenue and expense categories?
The main difference between them is which expense categories you subtract from the revenue number. Here are the three most common income metrics: Gross income: Also termed gross profit, this is the amount remaining after "cost of revenue" or "cost of goods sold" has been subtracted from the revenue.
