Revenue, costs and profit: What’s the difference?
Revenue is all the money that comes in. Costs are all the money that goes out. Profit is what’s left over: revenue minus costs. If more goes out than comes in, that’s called a loss. At the lemonade stand, 27 glasses at 50 cents each make €13.50 in revenue. Minus €1.80 in costs, that leaves €11.70 in profit.
Good to know: we explain how things work in Germany, where the books are set. Rules and numbers can be different where you live.
How the guinea pigs explain it in Volume 1: Wer kassiert mit? (Who Takes a Cut?)
What’s the difference between revenue, costs and profit?
Christian explains it at the stand: revenue is all the money that comes in. Costs are all the money that goes out, for example for sugar and cups. Profit is what’s left over, so revenue minus costs. At the lemonade stand, that means 27 glasses at 50 cents each make €13.50 in revenue. Take away €1.80 in costs, and that leaves €11.70 in profit.
What is a loss?
It’s when more money goes out than comes in. In the book, Christian says it in four words: More out than in. That’s why, before they start, he works out how many glasses they have to sell, at the very least, for the stand to be worth it at all.
What’s worth spending money on?
Daria has a clear rule for that: wasting money is dumb, but spending it in the right place is smart. You have to spend money to make money. She saves on the cups, because they end up in the trash anyway. She puts her effort into the sign, because everyone sees it and it brings customers to the stand.
- Profit is revenue minus costs.
- A loss means more out than in.
- Do the math first: how much do you have to sell, at the very least, for it to be worth it?
Gewinn
profit
In the books, every paragraph is in German with the English right below it. That way you pick up new words in both languages along the way.
Your turn: take the quiz
No account, no score, nothing gets saved. Just tap an answer.
1. The stand takes in €13.50 and has €1.80 in costs. How much is the profit?
2. What is a loss?
3. What would Daria rather put her effort and money into?
Volume 1: Wer kassiert mit? (Who Takes a Cut?)
Why taxes exist, who takes a cut and where the money goes. For kids ages 10 and up, bilingual German and English, 38 pages, illustrated in full color throughout.
