Earnings
Earnings refer to the profit a business makes after deducting all expenses from its total revenue.
In Filipino MSME terms: ito yung “totoong kinita ng negosyo” matapos ibawas ang puhunan, gastos, suweldo, renta, kuryente, at iba pang operational expenses.
Earnings show whether a business is financially healthy and sustainable.
Why Earnings Matter
For Filipino MSMEs, earnings are important because they:
- Show true profitability — hindi lang benta, kundi totoong kita
- Guide pricing decisions
- Help with budgeting and forecasting
- Support loan applications — banks look at earnings
- Determine owner compensation and reinvestment capacity
High sales don’t always mean high earnings — expenses can reduce actual profit.
Types of Earnings
- Gross Earnings — revenue minus cost of goods sold (COGS)
- Operating Earnings — earnings from core business operations
- Net Earnings — final profit after all expenses and taxes
- Earnings Per Share (EPS) — used in corporations to measure profitability per share
Simple Earnings Formula
Earnings = Total Revenue − Total Expenses
Example:
If your monthly sales are ₱80,000 and your total expenses are ₱60,000:
Earnings = ₱20,000
Example / Context
Example 1 (Sari‑Sari Store):
You earn ₱1,200 per day after deducting product costs and daily expenses.
Example 2 (Carinderia):
Your earnings increase when food cost is controlled and wastage is reduced.
Example 3 (Freelancer):
Your earnings are what’s left after software subscriptions, equipment, and taxes.
Example 4 (Retail Store):
Your POS system helps track earnings by automatically deducting COGS and expenses.
Related Terms
FAQs
1. Are earnings the same as revenue?
No. Revenue is total sales. Earnings are what’s left after expenses.
2. How can MSMEs increase earnings?
By reducing costs, improving pricing, increasing sales, and minimizing waste.
3. Are earnings and profit the same?
Yes, in most cases. “Earnings” is another term for “profit.”
4. Do earnings include taxes?
Net earnings already account for taxes. Gross and operating earnings do not.