What is Gross Earnings?
How Does Gross Earnings Work?
Let's assume restaurant chain XYZ sold $1 million worth of food last. The cost of that food was $330,000. Thus, the company's gross earnings are $1 million - $330,000 = $670,000.
Why Does Gross Earnings Matter?
Gross earnings do not exclude the cost of goods sold, general and administrative expenses, or other costs (those are typically incorporated in thecalculation).
For individuals, gross earnings are not the same as taxable income. For example, if John used $250 of his $1,000 a week to invest in his 401(k) plan, his gross earnings would be $1,000 but his taxable income would be $750.
Personalized Financial Plans for an Uncertain Market
In today’s uncertain market, investors are looking for answers to help them grow and protect their savings. So we partnered with Vanguard Advisers -- one of the most trusted names in finance -- to offer you a financial plan built to withstand a variety of market and economic conditions. A Vanguard advisor will craft your customized plan and then manage your savings, giving you more confidence to help you meet your goals. Click here to get started.
Read This Next
If you'd like us to answer one of your investing questions in our weekly Ask The Expert Q&A...Read More →
Is your auto loan's annual percentage rate (APR) higher than 6%? Or are your monthly payments on your car more than you can handle? Here's some good news: if you have good or excellent...Read More →
"You can always trust the Americans to do the right thing, but only after exhausting all other possibilities." --Winston Churchill When it comes to our...Read More →