Sales Revenue Minus Operating Expenses

Net sales gross sales customer discounts returns allowances gross profit net sales cost of goods sold operating profit gross profit total operating expenses net profit operating profit taxes interest net profi.

Sales revenue minus operating expenses. Gross profit is the total revenue minus the expenses directly related to the production of goods for sale called the cost of goods sold. Sales revenue minus operating expenses equals gross profit. The operating income of a company is the gross profit minus operating expenses. Gross profit sales revenue cost of goods sold operating cash flow net income after all expenses increase in operating liabilities payables etc increase in operating assets.

Under a perpetual inventory system the cost of goods sold is determined each time a sale occurs. In accounting and finance profit margin is a measure of a company s earnings relative to its revenue. Gross profit is sales minus cost of goods sold. A periodic inventory system does not require a detailed record of inventory items.

Negative operating income is an operating loss which means that cost of goods sold. Operating expenses include selling general and administrative expenses but exclude interest and taxes. Sales revenue is the income received by a company from its sales of goods or the provision of services. The company s operating profit can be found by subtracting the cost of goods sold and operating expenses such as payroll and rent from the company s total sales.

Revenue does not necessarily mean cash received. The company s total revenue or total net sales was the same net sales amount to revenue minus returned merchandise which is common for retailers. For example if a small business has 500 000 in sales one year but also paid 200 000 to acquire the goods sold and spent 100 000 on operating expenses the company s operating profit would be 200 000. Sales revenue minus operating expenses non operating revenues and expenses equals gross profit that totals million.

Operating income is located further down the. Gross profit minus provision for income tax non operating revenues and expenses equal operating income that.