As Earnings And Income Are Different?


Earnings and income are interchangeable and usually are synonymous with each other. However, there are different types of earnings and income, which have different meanings.

Earnings And Income

Earnings is the profit that the company earned during the period. The profit figure is listed as the net income in the statement of profit and loss. When investors refer to the profits of the enterprise, they usually turned to the net income or profit for the period. Similarly, income is synonymous with net income or profit.

Net profit is the profit of the company after payment of all expenses were deducted from total income. Typical costs may include interest on loans, expenses called selling, General and administrative expenses, income tax, depreciation and operating costs such as salaries, rent, and utilities. Revenues and net income may include income that are not a direct result of the sales of goods and services, which may include revenue from the sale of an asset or units and interest income on investments.

Both net income and earnings often called the bottom line because it is the profit remaining after all expenses have been debited, and as a result, sits at the bottom of the report on profits and losses.

Conversely, the company sits at the top of the report on profits and losses should not be confused with profit or net income. Income is the total income received before deducting expenses were removed. As a result, revenue is often called the top line.

Other Types Of Income And Earnings

Retained earnings is the cumulative profit or net income that the company discard or save for future use. Retained earnings is the key financial figures, as it shows investors how much money is available to Finance share buybacks, dividend payments, repayment of debt or invest in the company through the purchase of fixed assets. Retained earnings transferred to equity balance.

Earnings per share (EPS) is part of a company’s profit allocated to each outstanding Share of common stock. In other words, the earnings per share is the net profit or profit after any dividends, divided by average number of shares outstanding. Earnings per share serves as an indicator of the profitability of the company.

Investment income can be a source of revenue for companies and individual investors. The report on profits and losses of the company are positions that reads investment income or losses which a company transfers part of the net income obtained through investment. These investments can include bonds or Treasury securities.

Read more about profit and revenue, please read how gross profit and net income differ?

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