What is the difference between revenue and profit?

revenue - (Revenue is the total amount of income generated by the sale of goods or services related to the company's primary operations. If the company is a shoe retailer, the money it makes from selling shoes before accounting for any expenses is its revenue.)

profit - (This is called net profit, because it is the amount of income that remains after accounting for all expenses, debts, additional income streams and operating costs.)

• Although the terms "revenue" and "profit" are sometimes used interchangeably, they mean different things on your income statement. Revenue is the money your business takes in from all sources. Profit is what remains after you pay all the bills. You can have strong revenue but still post a net loss if your cash outflows are greater than your inflows. The income statement discloses your revenue sources and your business expenses. By following how your expenses affect your revenue, you can find ways to cut your costs and increase your profit.

• Revenue can most easily be thought of as the top line of an income statement or profit and loss statement. Revenue is the total amount of income generated by the sale of goods or services related to the company's primary operations. If the company is a shoe retailer, the money it makes from selling shoes before accounting for any expenses is its revenue. If the company also has income from investments or from a subsidiary company, that income is not considered revenue; it does not come from the sale of shoes. Additional income streams and various types of expenses are accounted for separately.
  
  Profit, conversely, is the infamous bottom line. This is called net profit, because it is the amount of income that remains after accounting for all expenses, debts, additional income streams and operating costs. In between the top and bottom line, the term "profit" may emerge in the context of gross profit and operating profit. These are steps on the way to net profit. Gross profit is revenue minus the cost of goods sold (COGS). Operating profit is gross profit minus all other fixed and variable expenses associated with operating the business, such as rent, utilities and payroll. When most people refer to a company's profit, they are referring to the net income remainder after expenses, or the net profit.
  
  While revenue and profit both refer to the money a company makes, it is possible for a company to generate revenue but have a net profit loss. This occurs when debts or expenses outstrip earnings.
  

Sales Revenue Vs. Profit

Sales revenue and profit are sometimes discussed synonymously but they are quite distinct terms. Sales or revenue is the money collected for the sale of goods or services. Profit is earnings on those sales after subtracting the costs of doing business.