Revenue vs. profit, explained. The top line and the bottom line tell two different stories
By Nexqual Desk ·
Revenue vs. profit, explained. The top line and the bottom line tell two different stories.
Revenue is everything customers paid the company. Net profit is what is left after every cost, interest payment and tax.
Revenue − All costs = Net profit
A store sells $1,000 of goods. Products, rent, wages and taxes cost $950 → $50 net profit.
How to read it:
• Revenue growth shows demand: are more people buying?
• Profit growth shows the business model: does each sale make money?
• Revenue up and profit down means costs are growing faster than sales.
Watch out: Big revenue says nothing about profit. Plenty of companies grow sales for years while losing money.
Save this for later. Next up: EPS: beat or miss.
Education only. Not financial advice.
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