Revenue

RECENT NEWS
The Economic Times  Jul 18  Comment 
The cashout facility would enable a person who has deposited money with a mobile company to withdraw it at any location he wishes.
Cellular News  Jul 18  Comment 
Google has reported surging revenues that beat analysts forecasts, and a profit that was up by a quarter, but missing forecasts. Click here for more.
The Hindu Business Line  Jul 18  Comment 
Google reported a 22 per cent rise in second quarter revenues on Thursday, with sales reaching $16 billion. But the company’s continued spending on potential new businesses like self-dri...
Benzinga  Jul 17  Comment 
IBM (NYSE: IBM) reported better than expect top and bottom line results in the second quarter. The company earned 3 cents above what the street expected, recording $4.32 per share on revenues of $24.40B.  Gross Margins reached 49.1%....
Agriculture Online  Jul 16  Comment 
There is a considerable range of revenues and returns that can occur for the 2014 cropping year.
Forbes  Jul 16  Comment 
While Yahoo's core search ad revenues (excluding TAC) improved by 6% year over year, its display ad revenues declined by over 7%. The primary reason for growth in search ads revenue was the growth in ad volume and increase in the price per click.
newratings.com  Jul 16  Comment 
WASHINGTON (dpa-AFX) - Regional bank Northern Trust Corp. (NTRS) reported Wednesday a profit for the second quarter that decreased five percent from last year, hurt by charges and write-offs as well as higher noninterest expense. However, adjusted...
DailyFinance  Jul 16  Comment 
TORONTO, ONTARIO -- (Marketwired) -- 07/16/14 -- Active Control Technology Inc. (the "Company" or "Active Control") (TSX VENTURE:ACT), today announced that several of the Company's clients, producing coal for their internal Power Generation...
newratings.com  Jul 16  Comment 
LONDON (dpa-AFX) - Euromoney Institutional Investor Plc (ERM.L), a publishing, events and electronic information group, Wednesday reported that headline revenues for the third quarter declined 6 percent mainly due to adverse currency movements....
Forbes  Jul 15  Comment 
Given that the Ariba and Fieldglass acquisitions are cloud-based SCM companies, we expect SAP to see an acceleration in revenue growth on a longer term. For FY14, we expect revenues from SCM software offerings to keep pace with the overall market...




 

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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