Total revenue minus total cost equals?

Total revenue minus total cost indeed results in profits before owner compensation and taxes, which reflects the operating effectiveness of a business. This calculation shows the financial performance of the enterprise, expressing the surplus generated by the business after covering all its costs but before accounting for salaries and taxes. This measure is crucial for understanding the core profitability of the business operations.

Net income, on the other hand, would include deductions for owner compensation and taxes, thus providing a more comprehensive picture of profitability after these expenses are accounted for. Gross earnings typically refer to revenue generated without considering any costs, which doesn't align with the question. Owner compensation relates to the payments made to owners or operators for their work, which would also not be factored in when simply calculating the result of total revenue minus total cost.

Understanding this calculation is essential for assessing the financial health of a micro-enterprise and helps in making informed decisions regarding pricing, cost management, and overall strategy.