What is the difference between revenue and profit?

Revenue (sometimes called "top line") is the total amount earned from selling goods or services — it says nothing yet about whether the business is actually making money once costs are accounted for.

Types of profit

• Gross profit — revenue minus the direct cost of producing the goods or services sold
• Operating profit — gross profit minus operating expenses like rent, salaries, and marketing
• Net profit (the "bottom line") — what's left after all expenses, taxes, and interest are subtracted from revenue

A business can have very high revenue and still lose money overall if its costs exceed that revenue — which is why profit, not revenue, is the real indicator of financial health.