Income is earnings. It is easy to confuse income, revenue, profits and earnings. In business revenues are proceeds from sales, profits are sales revenues less the operational cost of sales and earnings are the earnings that accrue to a company after it has paid all its obligations including meeting the expenses of its operations, repayment of loans and payment of taxes. For companies earnings are what’s left over after all those other obligations have been met and can then be paid to shareholders either as dividends or through share buy backs or to reinvest in more endeavors such as research and development or further capital asset acquisition to expand the operations of the business. In personal finance terms income and earnings are used interchangeably. To a private individual both income and earnings are money received either from work or from investments.
« Back to Glossary Index« Back to Glossary Index