Revenue VS Profit

Revenue VS Profit, what’s the difference? simplify.

Revenue is the income generated before any expenses is taken out.

The revenue formula is:

Revenue = Item Quantity x Item Sale price

Example

If you sell 100 water bottles for $1 each

Revenue = 100x $1 = $100

Profit is the amount of income that remain after all expenses is take out.

The formula for profit is:

Profit = Revenue – expenses

Using the same example as before

If your revenue is $100 and expenses are $50 then

Profit = $100 – $50 = $50

So is better to focus in profit than revenue.

Since a business came can have 1 million dollars in revenue and 1 million dollars in expenses to generate 0 profit.

Another business can have $1000 in revenue and just $100 in expenses to generate $900 in profits.