Dictionary / How companies make money
Revenue vs Profit
Revenue is all the money coming in from sales. Profit is the money left over after paying every cost. Revenue is the top line; profit is the bottom line.
A simple example
A food truck sells $50,000 of tacos in a year. That is its revenue. Food, gas, wages and the truck loan cost $42,000. The $8,000 left is its profit.
Is revenue the same as profit?
No, and the gap can be huge. A supermarket can have giant revenue but keep only a few cents per dollar. A software company can have smaller revenue but keep a much bigger share as profit. The share kept is called the profit margin.
Is revenue money in or out?
Revenue is only money in. Costs are money out. Profit is what you get when you put the two together.
Earnings vs revenue
"Earnings" usually means profit, not revenue. When the news says a company "beat earnings", it means profit came in higher than expected. Earnings per share is profit divided by the number of shares.
Which one matters more?
Both. Growing revenue shows demand. Growing profit shows the business can turn that demand into money for owners. The best companies grow both over time.
See it in real companies
Open a company to see what it sells and how it makes money.