Revenue and Sales | | | | | |
Total Revenue | Revenue | Represents the total income generated from sales of goods or services during a specific period. | Assess the company’s overall sales and revenue performance. | Total revenue for the year is $1,000,000. | N/A |
Gross Revenue | Revenue | Indicates the total revenue before any deductions, such as discounts, returns, or allowances. | Evaluate the company’s total sales revenue. | Gross revenue for the quarter is $500,000. | N/A |
Net Sales | Revenue | Represents the revenue remaining after deducting returns, discounts, and allowances from total revenue. | Assess the company’s effective sales revenue. | Net sales for the month are $75,000. | Net Sales = Total Revenue – (Returns + Discounts + Allowances) |
Cost of Goods Sold (COGS) | | | | | |
Cost of Goods Sold (COGS) | Cost | Indicates the direct costs associated with producing or purchasing goods sold during a specific period. | Assess the cost efficiency of producing or purchasing products. | COGS for the quarter is $250,000. | N/A |
Gross Profit | Profit | Represents the profit remaining after deducting COGS from net sales. | Assess the profitability of selling goods or services. | Gross profit for the year is $400,000. | Gross Profit = Net Sales – COGS |
Operating Expenses | | | | | |
Operating Expenses | Cost | Represents the total expenses incurred in the day-to-day operations of the business, excluding COGS. | Assess the company’s cost management and operational efficiency. | Operating expenses for the quarter are $100,000. | N/A |
Operating Income (Operating Profit) | Profit | Indicates the profit or income generated from core business operations before interest and taxes. | Assess the profitability of the company’s core operations. | Operating income for the month is $50,000. | Operating Income = Gross Profit – Operating Expenses |
Interest and Financing Expenses | | | | | |
Interest Expense | Cost | Represents the cost of borrowing money or paying interest on loans and debts. | Assess the impact of interest expenses on profitability. | Interest expense for the year is $20,000. | N/A |
Tax Expenses | | | | | |
Income Tax Expense | Cost | Indicates the amount of income tax payable by the company based on its taxable income. | Assess the company’s tax liability and overall profitability. | Income tax expense for the quarter is $10,000. | N/A |
Net Profit (Net Income) | Profit | Represents the profit remaining after deducting all expenses, including COGS, operating expenses, interest, and taxes, from revenue. | Assess the overall profitability of the company. | Net profit for the year is $200,000. | Net Profit = Gross Profit – Operating Expenses – Interest Expense – Income Tax Expense |
Earnings Before Interest and Taxes (EBIT) | Profit | Indicates the company’s earnings before considering interest and taxes. | Assess the core operating profitability of the company. | EBIT for the quarter is $80,000. | EBIT = Operating Income + Interest Expense |
Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) | Profit | Represents the company’s earnings before interest, taxes, depreciation, and amortization expenses. | Assess the company’s operational profitability and cash flow. | EBITDA for the year is $300,000. | EBITDA = EBIT + Depreciation + Amortization |