Accounting terms
Sales vs. Revenue
Sales <> Revenue
- Sales is revenue generated from selling products or services to customers
- But it's not necessarily all of the Revenue of a company because Revenue can be generated in other ways, specifically:
- Non-operating revenue like income from the sale of assets, interest, royalties, etc
Gross Sales vs. Net Sales
Gross Sales <> Net Sales
- Gross sales is the total amount of sales for a company
- Net sales subtracts things like returns
Gross Profit
Gross Profit = Net Sales - COGS
Gross Margin
Gross Margin = Gross Profit / Net Sales
Gross Margin = (Net Sales - COGS) / Net Sales
First calculate Gross Profit by subtracting COGS from Net Sales, then divide that number by Net Sales to get a number between 0 and 1. This percentage is the Gross Margin.
Net Profit
Also known as
- Bottom line
- Net income
- Net earnings
A measure of profitability after all costs and taxes. This is the actual profit after deducting operating expenses that are excluded from gross profit.
Source:
- Me
Graph:
- 108.60 Data Analysis - Accounting analysis >> 108.60.10 Data Analysis - Accounting terms
- 108.60.10 Data Analysis - Accounting terms >> 108.60 Data Analysis - Accounting analysis