Difference between revenue, net and operating income

[Mr. R]

Hi all,

I'm just brushing up on my terminology and wondered if someone could break down the meaning and differences of the following for me.

'Operating Income' - I understand this to be income before expenses/tax are deducted.
'Net Income' - I understand this to be income after expenses/tax are deducted.

If I am correct, then what is 'Revenue' and how does it differ from either of the above terms?

What does it mean if a company's net and operating income are down on last year, but their revenue is massively up?

Thanks!

 

[Scalloway]

Revenue is the income that a business has from its normal business activities. Also known as sales, fees etc.

A company can increase its sales but its cost rise faster. The rise in sales may be due to spending a lot more money on marketing. The company may be operating more efficiently due to closing a department but costs have been incurred in redundancy payments etc.