Revenue

RECENT NEWS
SeekingAlpha  3 hrs ago  Comment 
By Trefis: International Business Machines (IBM) posted its Q1 results on April 16. The company reported a decline in revenues due to cross currency headwinds and low demand for its servers. While the revenues declined by 3.9% year on year to...
Cellular News  Apr 17  Comment 
Egypt's state-controlled landline operator, Telecom Egypt is to pay 6% of the revenues from its soon to launch MVNO to the telecoms regulator as part of its license fee. Click here for more.
The Hindu Business Line  Apr 17  Comment 
Noida-based HCL Technologies on Thursday reported a consolidated net profit of Rs 1,624 crore for the third quarter ended March 31, 2014 up 59 per cent from the corresponding period last year.
TechCrunch  Apr 16  Comment 
 Zoosk just filed its S-1 registration statement today, announcing its plans to raise $100 million in an initial public offering. The company, which has offers up a website and apps for daters around the world to find each other, posted a net...
Forbes  Apr 16  Comment 
The fact that the bank missed earnings expectations, despite having issued a warning last month about lower revenues for some of its business units, suggests that investors grossly underestimated the extent of the decline.
The Hindu Business Line  Apr 16  Comment 
Mid-size company Mindtree has reported an 8.9 per cent growth in net profit to $15.9 million for the fourth quarter ended March 31, 2014. The company posted revenues of $132.8 million, a...
newratings.com  Apr 16  Comment 
LONDON (dpa-AFX) - Distribution and outsourcing group Bunzl Plc (BZLFY.PK, BNZL.L) reported Wednesday that its first-quarter revenues at constant exchange rates increased 5 percent from last year. Meanwhile, underlying Group revenue growth is at a...
Forbes  Apr 15  Comment 
Even though the bank has seen revenues shrink from the peak figure of almost $22 billion in Q4 2012 – when the mortgage refinancing wave died – to the current figure of $20.6 billion, effective expense management has ensured that the bottom...
newratings.com  Apr 15  Comment 
ATLANTA (dpa-AFX) - Beverages giant Coca-Cola Co. (KO) reported Tuesday a profit for the first quarter that decreased eight percent from last year, despite higher worldwide volumes, reflecting a revenue drop. However, adjusted earnings per share...
Forbes  Apr 15  Comment 
We expect that IBM will continue to report growth for software segment and GBS revenues in Q1. Additionally, we expect order backlog to improve, which will boost revenues in the future. Furthermore, as IT spending rebounds in 2014, we expect the...




 

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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