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Revenue Statement ??? (1 Viewer)

16021991

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Hi Everyone,

I have the balance sheet down, but I get so so confused by revenue statements (e.g. where everything goes - individual things as well as gross profit, net profit, etc). :spzz:

I've looked up "sample revenue statements", "examples of profit and loss statement", "sample income statements", etc. But can't make sense of it really.

Can anyone give me easy to understand tips about revenue statements or maybe examples of revenue statements you;ve done/found??

Thanks guys :)
 

nimssyk

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Lol ill give it a crack

Ok - first of all u should know that a revenue statement is officially called Statement of Financial Performance

It shows the businesses operating efficiency.

It highlights the Revenue earned, expense incurred over accounting period and therefore if the business has made profit or loss (hence the other name profit/loss staement)

The main things that get shown are:

1- Operating revenue from sales of inventory, services, revenue from non-operations (ie. Commission, rent, interest)

2- the Cost of Goods Sold --> or how much inventory the business had at the begining of the financial period plus how much they bought during the period minus the amount of closing inventory (all in $ values)

3 - Then when u take COGS away from revenue (Sales - COGS) you get the businesses GROSS PROFIT

4 - Then the next set of headings are the businesses expenses --> i.e. costs incurred in doing business but not actually buying stock (eg. phone bills, rent, marketing etc)

When you take away Expenses from Gross profit (Gross Profit - Expenses) you get the businesses Net profit before tax

a lot of the time it just stops there ...but real ones are much more complicated
 

Eddykungfu

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Here are the Equations to hopefully Help :).

Sales - Cost of Goods Sold = Gross Profit

Cost of Goods Sold = Opening Stock + Purchases - closing Stock.

Gross Profit + Other Income = Gross Income. <<-- note this is not as common.

Gross Income - Operating Expenses = Net Profit.
 

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