Gross income and net income are two critical financial metrics, but they serve different purposes in assessing a company's or individual's financial performance. Gross income represents the total revenue or earnings generated before any deductions are made. For a business, this is typically the total sales revenue minus the cost of goods sold (COGS). For an individual, it is the total earnings from wages, investments, or other sources before taxes and deductions.

Net income, on the other hand, is the amount remaining after all expenses, taxes, and deductions have been subtracted from gross income. For a business, this includes operating expenses, interest, taxes, and other costs. For an individual, it reflects take-home pay after taxes, insurance, retirement contributions, and other withholdings.

The key difference lies in what each metric represents. Gross income highlights the efficiency of core operations or earning potential, while net income provides a clearer picture of overall profitability or disposable income. For businesses, a high gross income with a low net income may indicate high operating costs or inefficiencies. For individuals, the gap between gross and net income shows the impact of taxes and deductions on their earnings. Understanding both metrics is essential for financial planning, budgeting, and evaluating financial health.