Revenue

RECENT NEWS
Agoracom  Sep 3  Comment 
Sherwood Park, Alberta / September 3 rd 2014 / Virtutone Networks Inc. ("Virtutone" or the "Company") (TSX Venture: VFX.V) is pleased to announce that the Company has generated approximately $11.4 million in revenue for the month of...
Forbes  Sep 3  Comment 
Both distribution and advertising have been trending well for the company over the past few years. NBCUniversal has been focused on original programming, thereby providing a boost to the ratings for its networks in the past. However, 2014 has been...
Financial Times  Sep 2  Comment 
Bumper deal environment helped bank record its best results in its 50-year history as did strong revenues from debt and equity offerings
Cellular News  Sep 1  Comment 
Mobile services revenue declined by 1.1% in a year to the end of December 2013 while fixed revenue fell by 3.7% as legacy revenue continued to decline, Click here for more.
WA Business News  Sep 1  Comment 
Drug and alcohol support service Holyoake has strengthened its growing social enterprise revenue with a new partnership focused on mental health in the workplace.
Benzinga  Aug 27  Comment 
Stock is listed under ticker KZ © 2014 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
SeekingAlpha  Aug 27  Comment 
By IAEResearch: SodaStream's (NASDAQ:SODA) price movement has been extremely disappointing over the last twelve months - despite a gain over the last two weeks, the stock is still down over 48% during the period. There have been a number of...
SeekingAlpha  Aug 27  Comment 
By Power Hedge: Noble Corporation (NYSE:NE), one of the largest offshore drilling contractors in the world, has a number of drilling rigs whose contracts are scheduled to conclude before the end of the year that have not obtained new contracts to...
Cloud Computing  Aug 27  Comment 
According to the International Data Corporation (IDC) Worldwide Quarterly Server Tracker, factory revenue in the worldwide server market increased 2.5% year over year to $12.6 billion in the second quarter of 2014...
Forbes  Aug 26  Comment 
The top four banks reported almost $400 billion in total payments made by customers using cards issued by them in Q2 2014 ? making this the best quarter in this regard since the economic downturn of 2008. The primary reason for the fourth...




 

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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