Revenue

RECENT NEWS
Forbes  Oct 17  Comment 
Schwab’s trading revenues declined by 7% y-o-y to $209 million in Q3, owing to low trading volumes during the quarter. Robust growth in interest-based revenues and asset management revenues more than offset the decline in trading revenues. Net...
newratings.com  Oct 16  Comment 
WASHINGTON (dpa-AFX) - Regional bank BB&T Corp. (BBT) reported Thursday a profit for the third quarter that nearly doubled from last year, despite lower revenues, reflecting a drop in provision for credit losses and provision for income taxes....
Financial Times  Oct 15  Comment 
Analysts at Morgan Stanley think this is ‘as good as it gets’ for Intel
Forbes  Oct 15  Comment 
In this earnings announcement, we expect the enhanced campaigns program to once again drive revenue growth across its mobile and PC search ad divisions. Furthermore, as YouTube continues to gain popularity, we expect display ad revenues to be higher.
newratings.com  Oct 14  Comment 
MIDLAND (dpa-AFX) - Nanoco Group Plc's (NANO.L) shares dropped around 6 percent in London trading after the maker of semiconductor materials used in LCD displays reported Tuesday wider annual loss, reflecting higher payroll...
The Hindu Business Line  Oct 13  Comment 
Bets on demand from smaller cities
TechCrunch  Oct 11  Comment 
 SoundCloud, the popular online music and audio sharing platform, is now exceeding 175 million listeners each month and is on track to reach 200 million. But its rapid growth has seen the company’s costs run away from its revenues. According...
SeekingAlpha  Oct 9  Comment 
By Jay Somaney: Infosys (NYSE:INFY), India's second largest IT/outsourcing company, will be report its earnings for its FQ:02 ended September 30 before the opening bell tomorrow. Currently the Street is expecting earnings of $0.81 per share on...
newratings.com  Oct 9  Comment 
TAIPEI (dpa-AFX) - ChipMOS Technologies Ltd. (IMOS), a provider of semiconductor testing services, said revenues for the month of September rose to $62.7 million from $55.2 million a year earlier. For the third quarter ended September 30,...
Financial Times  Oct 8  Comment 
Shares fall after retailer announces Art Peck will succeed Glenn Murphy as CEO




 

The term revenue most commonly refers to Net Revenue but it can also be used as Gross Revenue.

Revenue is the total amount of money a company takes in before any expenses.

Net Revenue is the amount of a company's gross revenue plus all negative revenue items. For instance, in the retail industry, gross revenue includes all sales made by a retailer during the accounting period. Net revenue, however, will also exclude the costs associated with items like refunds on returned items, discounts and other negative sales revenue items.

Often times, net revenue can refer to revenue a company receives after it pays its partners. For example, Google (GOOG) arrives at net revenue by subtracting Traffic Acquisition Costs (TACs) from its gross revenue. TACs are comprised of payments made to its Adsense network partners (Google ads displayed on third-party websites are subject to a revenue sharing program), as well as fees related to non-conventional partnerships (such as Google being the first search engine listed in the Mozilla Firefox built-in search toolbar).

This is a subtle difference from Cost of Goods Sold (COGS) - in the case of TACs, these are costs directly related to generating revenue (which is then split between different partners). COGS, on the other hand, refers to overhead and "manufacturing" costs related to the production of goods sold. Analogously, Google's COGS would include expenses incurred in data center operations.

Ratio analysis can be implemented and utilised for the comparative measurement of financial data among several companies of the same industry to facilitate wise investment, as ratios in general involve a process of standardization. Two main indicators-ratios can be used for the evaluation of a company's performance:

  1. Activity ratios: Asset Turnover or Efficiency Ratio = Total Revenue/ Assets

Activity ratios describe the relationship between the company's level of operations(usually defined as sales and the assets needed to sustain the activity). The higher the ratio, the more efficient the company's operations, as relatively fewer assets are required to maintain a given level of operations(sales), or the company expoits its assets in an efficient way maximising its sales. Monitoring the trends in these ratios over time and in comparison to other firms in the industry, can point out potential trouble spots or opportunities that would facilitate investing decisions.

  1. Profit Margins or Return on Sales or Profitability ratio = Profit/Revenue

It is a measure of a company's profitability and it is the relationship between the company's costs and its sales. The profitability ratio indicates the proportion of Revenue that form the company's profit, after deducting any operating and other expenses the company has. It can be also interpreted as the proportion of profits generated from each dollar of sales, showing how profitable a company is.

  1. Return on Assets (ROA) = ( (Net Income/Sales) * (Sales/Assets) )

This ratio is a combination of the two aforementioned ratios that can be summarised in the term Return on Assets, that measures the overall productivity of assets.

Net Revenue versus Total Revenue

Net Revenue (also Revenue, Net Sales, or Sales) is the total revenue or gross revenue minus the costs associated with returned or undelivered goods and commissions. Total Revenue or Gross Revenue on the other hand is simply all positive revenues. This distinction is particularly important for certain sectors like banking which relies heavily on commissions and Retail which can experience frequent returned items.[1]

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