Forbes  12 hrs ago  Comment 
Like many of you, I enjoyed watching the College Football Playoff championship game last week between the University of Alabama and Clemson. I should say what parts of the game that I was actually awake for. I drifted in and out sleep for a good...
The Hindu Business Line  Jan 17  Comment 
The on-demand home services start-up plans to indirectly expand its reach to smaller towns, target more customers and revenues  Jan 13  Comment 
BERLIN (dpa-AFX) - Fuchs Group said Friday that it expects for the financial year 2016 an increase of sales revenues of about 9% and a growth of earnings before interest and tax or EBIT of about 8%. The fourth quarter 2016 figures for Europe and...  Jan 13  Comment 
New record figures for sales revenues and earnings in 2016 DGAP-Ad-hoc: FUCHS PETROLUB SE / Key word(s): Final Results New record figures for sales revenues and earnings in 2016 13-Jan-2017 / 13:51 CET/CEST Disclosure of an inside information...
Forbes  Jan 12  Comment 
It likely isn't just a 'Trump bump' -- there’s been a fundamental change in both U.S. carriers’ operating formula and the way they are being analyzed as investment vehicles. And the results are striking.
Forbes  Jan 11  Comment 
Reports suggest that Facebook is testing a new “mid-roll” ad format which will give its video publishers the option to insert ads into their video clips, after the video has played for at least 20 seconds. The company will share 55% of the...  Jan 11  Comment 
LONDON (dpa-AFX) - Vectura Group plc (VEC.L), a device and formulation business for inhaled airways disease, reported Wednesday that revenues for 2016 are anticipated to be in line with the Board's expectations. In its pre-close update ahead...
Forbes  Jan 10  Comment 
Last night, Clemson Universitydefeated the University of Alabama 35-31 in the college football national championship game. The victory shouldbringmany millions of new dollars to Clemson University-- both in terms of licensing dealsand increased...
Flightglobal  Jan 10  Comment 
UK business aviation services provider Gama Aviation has secured two long-term special mission contracts, which it says will help to bolster revenues by more than 10 million ($12.2 million).


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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