What Is the Difference Between Turnover and Profit?

Operating income is income derived from engaging in main business or other business. It refers to the monetary income obtained by a commercial enterprise from selling goods or providing labor services within a certain period of time. It is divided into main business income and other business income. Such as the commercial enterprise's sales revenue, the production and processing enterprise's product sales revenue, the catering industry's sales revenue of the food and beverage industry, the service industry's service revenue, the warehousing enterprise's warehousing revenue, the transportation company's freight income, the agency transportation income, etc. When income is generated from the sale of goods, it is calculated through the operating income account, and the bank account is debited (increased) or cash, and the income account is credited (increased). Income from part-time businesses that do not fall within the scope of the company's main business is treated as income from subsidiary business. ^[1]

Operating income

Operating income = main business income + other business income

Or operating income = product sales volume (or service volume) × product unit price (or service unit price)

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1. Operating income is the source of funds for companies to compensate for production and operation expenses.

The realization of operating income is related to the normal progress of corporate reproduction activities

Operating income includes main business income and other business income.

Usually in

The realization of operating income is generally the product or commodity has been issued, the project has been delivered, the service or labor service has been provided, the price has been collected or the right to receive the price has been obtained.

There are many methods for forecasting business income. The commonly used methods are judgment analysis, survey analysis, trend analysis, causality analysis, and cost-volume-profit forecasting methods. 1,

The preparation of the operating income plan is mainly to calculate its sales income through the predicted sales volume. Sales revenue can be calculated separately for various products, and then totaled to calculate the total sales revenue for the planning period. Sales revenue is determined by the number of products sold and the sales price.

The control of operating income is to supervise and manage the process and results of production and operation activities in accordance with the requirements of the plan to achieve the completion of the predetermined

1. Strengthen the prediction and analysis of the market and adjust the company's

Profit refers to the operating results of an enterprise in a certain accounting period, and is divided into operating profit, total profit and net profit. formula:

Operating profit = operating income-operating costs-operating taxes-period expenses-asset impairment losses + net income from changes in fair value + net investment income ^[2]

Operating income is the main source of profit.