What is the Difference between Turnover, Revenue and Profit of a Company?

When I started reading non fiction books related to business, at that time there were many terms which I considered almost the same.

And whenever I used to hear and read the turnover of any company I used to be very excited and thinking how much these companies are making profits.

But that time i actually really don’t know about these terms and the difference between them.

So fast forward to the time when I joined the startup I found the correct meaning of these terms.

So I just think that still many newbie people who want to come into the field want to know the difference between these terms.

Turnover

Turnover is simple meaning total no of sales happen through product/ service in the business

Revenue

Revenue is also the same as the amount of money you come from sales but some people think that money comes from investors is also counted in Revenue but it is not true the money you receive from investors does not count as revenue.

Example: Many people see nowadays making money online ads all over social media and they think it is easy to make that much of revenue but forget that revenue includes all the costs of creating that stuff, Advertisement amount that is spent and profit. So revenue is not just profit.

Profit

It is simply the difference between revenue and expenses. 

These terms don’t have any rocket science, but when you don’t know the meaning of these terms, sometimes it creates issues. It is better to know the meaning after all these are common terms that are used in the startup world.

I hope this answer helps you to understand the difference between these terms.

Thanks for reading.

Spread the love

No Responses

  1. Pingback: How I Started a Rental Start Up in India April 19, 2021

Add Comment