Revenue

RECENT NEWS
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
Forbes  Oct 8  Comment 
One of the reasons cited by Johnson Controls behind looking to let go of its Global Workplace Solutions unit is so that it can position itself solely as a manufacturer, rather than a service provider. Global Workplace Solutions is actually a...
newratings.com  Oct 7  Comment 
LONDON (dpa-AFX) - Spirent Communications Plc (SPT.L, SPMYY.PK) said it expects revenues for the third quarter to be slightly below $110.0 million, compared with $107.7 million last year. While trading conditions softened in the latter part of the...
newratings.com  Oct 3  Comment 
LONDON (dpa-AFX) - Shares of Renishaw Plc (RSW.L) climbed around 10 percent in the early morning trading in London after the manufacturer of precision metrology and inspection equipment for healthcare sector reported Friday a significant growth in...
newratings.com  Sep 30  Comment 
AEVIS Holding SA: Substantial increase of revenues and operating profit in first half-year 2014 AEVIS Holding SA / Key word(s): Interim Report 30.09.2014 07:15 Release of an ad hoc announcement pursuant to Art. 53...
Forbes  Sep 29  Comment 
In the first half of 2014, music streaming revenues have surpassed CD sales for the first time in the United States. That’s according to data published by the Recording Industry Association of America last week. Total streaming revenues,...
guardian.co.uk  Sep 20  Comment 
All too often, the uncomfortable temptation for regional exchequers is to succumb to a game of beggar-thy-neighbour In the midst of austerity, when the local government sector is braced for yet more funding cuts, English devolution is a recipe for...




 

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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