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Other Added - Dissecting Income Statement
There is a big difference between looking after your own finances while living alone, or with parents, and living with a partner. The transition can be very difficult, especially if both partners are strongly independent, or one partner is financially weak and the other strong. In fact, it is an area of a new relationship that has many pitfalls if you do not set the ground rules from the start.It is best to sit down together and quietly plan your finances, even before you get married or move in together. Then, when you do so, it is important to be open with each other, and discuss
Operating Income. This is the difference between gross profit and operating expenses. Operating expense here is the total cost of research development and selling general & administrative. Operating income can be thought as the income generated as a result of a firm's primary business activities.
Other Income/Expense. This is the income earned or expense incurred outside of the firm's business activities. For example, capital gain on sale of asset or expense incurred due to lawsuit punitive damage.
Interest Expense. This is the expense incurred from borrowing long term debt. A firm gets additional funding by borrowing money. In turn, it has to p
Eliminate credit card debt from your life, and you will eliminate a lot of problems from your life. It is very easy to be trapped by credit card debt; everybody loves that plastic. Getting out is a different story. Yes, it is complicated, but it is not impossible. You may only need a little help in doing so.If you do not have too much credit card debt, the first thing you may want to try to do is take advantage of zero interest rate offers. Pay down your interest rate debt and put the balance on a zero rate card, then start to pay off the principal. This will work if you have
Analyzing income statement will tell us how much profits a company can earn. This will in turn tell us how much percentage return we can expect. So, without further ado, let us go through the components of a typical income statement.
Revenue. Also called sales, Revenue is the lifeblood of a company. To earn revenue, a company has to sell. For retail companies like Walmart, you have to sell items at the stores. For service companies such as H&R Block, it has to sell its expertise to tax filers.
Cost of Revenue. Sometimes called Cost of Good Sold, Cost Revenue is the direct cost of providing a particular good or service to customers. For example, the cost of selling one can of soda at Walmart is the price it bought the soda from manufacturers.
Gross Profit This is the difference between the price of good or service that a firm sells and the cost of providing that particular good or service. In other words, it is the mark up that a firm impose on its customers. For example, if Walmart sells a can of soda for $ 1.00 while it costs $ 0.60 from the manufacturer, then gross profit of Walmart for selling that can of soda is $ 0.40. When gross profit is expressed in term of percentage, it is called gross profit margin. In this case, gross profit margin of Walmart is ($0.40/ $ 1.00) x 100% = 40%.
Research & Development.This is the cost of doing research in order to provide future revenue or cost improvement. Either way, it is designed to boost the firm's future profit. For example, Walmart may spend certain dollars in order to improve its inventory management, which in turn will reduce cost of operating its business.
Selling General & Administrative. This is a really broad category. Basically, this is the fixed cost of doing business. Marketing expense, office rent, manager and the CEO's salary is included here. So do depreciation and amortization expense. For your information, depreciation expense is the expense incurred every year for buying a long-term assets such as machinery or vehicle. Amortization expense is the expense incurred for obtaining goodwill, which is obtained from acquiring companies above its net asset value. When a company is considering layoffs, it is this cost that they are trying to reduce.
Operating Income. This is the difference between gross profit and operating expenses. Operating expense here is the total cost of research development and selling general & administrative. Operating income can be thought as the income generated as a result of a firm's primary business activities.
Other Income/Expense. This is the income earned or expense incurred outside of the firm's business activities. For example, capital gain on sale of asset or expense incurred due to lawsuit punitive damage.
Interest Expense. This is the expense incurred from borrowing long term debt. A firm gets additional funding by borrowing money. In turn, it has to pa
When internet was in its early stages, links were used in a very straight forward way to help visitors find relevant information through one’s website. However, as the importance of links increased due to run for search engine optimization, links have since been used to help webmasters instead of visitors. All this began when Google came up with its concept of “PageRank” as a method of website classification based on their importance and relevance. By Google’s logic, the importance of a site increases by links that point to it, and the imp
Revenue. Also called sales, Revenue is the lifeblood of a company. To earn revenue, a company has to sell. For retail companies like Walmart, you have to sell items at the stores. For service companies such as H&R Block, it has to sell its expertise to tax filers.
Cost of Revenue. Sometimes called Cost of Good Sold, Cost Revenue is the direct cost of providing a particular good or service to customers. For example, the cost of selling one can of soda at Walmart is the price it bought the soda from manufacturers.
Gross Profit This is the difference between the price of good or service that a firm sells and the cost of providing that particular good or service. In other words, it is the mark up that a firm impose on its customers. For example, if Walmart sells a can of soda for $ 1.00 while it costs $ 0.60 from the manufacturer, then gross profit of Walmart for selling that can of soda is $ 0.40. When gross profit is expressed in term of percentage, it is called gross profit margin. In this case, gross profit margin of Walmart is ($0.40/ $ 1.00) x 100% = 40%.
Research & Development.This is the cost of doing research in order to provide future revenue or cost improvement. Either way, it is designed to boost the firm's future profit. For example, Walmart may spend certain dollars in order to improve its inventory management, which in turn will reduce cost of operating its business.
Selling General & Administrative. This is a really broad category. Basically, this is the fixed cost of doing business. Marketing expense, office rent, manager and the CEO's salary is included here. So do depreciation and amortization expense. For your information, depreciation expense is the expense incurred every year for buying a long-term assets such as machinery or vehicle. Amortization expense is the expense incurred for obtaining goodwill, which is obtained from acquiring companies above its net asset value. When a company is considering layoffs, it is this cost that they are trying to reduce.
Operating Income. This is the difference between gross profit and operating expenses. Operating expense here is the total cost of research development and selling general & administrative. Operating income can be thought as the income generated as a result of a firm's primary business activities.
Other Income/Expense. This is the income earned or expense incurred outside of the firm's business activities. For example, capital gain on sale of asset or expense incurred due to lawsuit punitive damage.
Interest Expense. This is the expense incurred from borrowing long term debt. A firm gets additional funding by borrowing money. In turn, it has to p
Project management is a skill that must be learned. There are a number of talents one needs to possess in order to be successful in any area requiring project management. There are a number of resources available to the individual wanting to learn about project management and for those individuals looking for project management certification. Such resources include online classes, courses, and books, all of which can help an individual develop project management skills.For anyone managing any project, the object of the task is to see it through to its completion. Further, the
Research & Development.This is the cost of doing research in order to provide future revenue or cost improvement. Either way, it is designed to boost the firm's future profit. For example, Walmart may spend certain dollars in order to improve its inventory management, which in turn will reduce cost of operating its business.
Selling General & Administrative. This is a really broad category. Basically, this is the fixed cost of doing business. Marketing expense, office rent, manager and the CEO's salary is included here. So do depreciation and amortization expense. For your information, depreciation expense is the expense incurred every year for buying a long-term assets such as machinery or vehicle. Amortization expense is the expense incurred for obtaining goodwill, which is obtained from acquiring companies above its net asset value. When a company is considering layoffs, it is this cost that they are trying to reduce.
Operating Income. This is the difference between gross profit and operating expenses. Operating expense here is the total cost of research development and selling general & administrative. Operating income can be thought as the income generated as a result of a firm's primary business activities.
Other Income/Expense. This is the income earned or expense incurred outside of the firm's business activities. For example, capital gain on sale of asset or expense incurred due to lawsuit punitive damage.
Interest Expense. This is the expense incurred from borrowing long term debt. A firm gets additional funding by borrowing money. In turn, it has to p
When it’s job hunting time, too many candidates for direct marketing jobs forget everything they’ve learned about selling a product and think in terms of getting a job. If anyone should have an easy time of getting a job, it’s the direct marketing specialist, no? After all, what is job hunting but selling the most important product you have to offer – yourself? When you stop thinking in terms job seeking, and start thinking as you do when you’re developing a campaign to sell a new product, you’ll find the employers lining up to interview you – and offer you those direct marketing and dat
Selling General & Administrative. This is a really broad category. Basically, this is the fixed cost of doing business. Marketing expense, office rent, manager and the CEO's salary is included here. So do depreciation and amortization expense. For your information, depreciation expense is the expense incurred every year for buying a long-term assets such as machinery or vehicle. Amortization expense is the expense incurred for obtaining goodwill, which is obtained from acquiring companies above its net asset value. When a company is considering layoffs, it is this cost that they are trying to reduce.
Operating Income. This is the difference between gross profit and operating expenses. Operating expense here is the total cost of research development and selling general & administrative. Operating income can be thought as the income generated as a result of a firm's primary business activities.
Other Income/Expense. This is the income earned or expense incurred outside of the firm's business activities. For example, capital gain on sale of asset or expense incurred due to lawsuit punitive damage.
Interest Expense. This is the expense incurred from borrowing long term debt. A firm gets additional funding by borrowing money. In turn, it has to p
How do you get tens of thousands of targeted visitors to your web site? How do you persuade them to do what you want them to do once they’re there? How can you increase your online sales enough to retire from your day job? How do you do all this without spending any money on advertising?Every day our brains are bombarded with advertisements fighting for our attention, including; newspaper ads, magazine ads, yellow pages, catalogues, circulars, radio pitches, TV ads, store fronts, illegal posters, bill boards, spam email and legitimate email. And these are only some of them.that they are trying to reduce.
Operating Income. This is the difference between gross profit and operating expenses. Operating expense here is the total cost of research development and selling general & administrative. Operating income can be thought as the income generated as a result of a firm's primary business activities.
Other Income/Expense. This is the income earned or expense incurred outside of the firm's business activities. For example, capital gain on sale of asset or expense incurred due to lawsuit punitive damage.
Interest Expense. This is the expense incurred from borrowing long term debt. A firm gets additional funding by borrowing money. In turn, it has to pay interest for the loan. This interest is called interest expense.
Income Before Tax, Income Tax Expense. Once you take out all the other income/expense and interest expense from operating income, you get income before tax. A profitable firm has to pay tax on this income. The tax paid by the firm is found in the income statement under category income tax expense.
Net Income. This is our final destination. This is the reason why we go through all the components of an income statement. Also known as net profit, net income is what a company earns at a specific time frame. From here on, you can then calculate the fair value of the firm. Does it yield less than 4% treasury bond, which is considered safe haven? If so, the common stock definitely needs to be sold or avoided.
Please note that each companies have different ways of presenting their income statements. However, most companies present them similar to the above criteria. If some companies give a totally different ways of presenting their financial performance, it is best to ask them questions or avoid the common stock altogether.
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