Earnings sales revenue

The profit margin on sales, also called return on sales or net profit margin, is an important foundational concept. Looking at the equation, remember that net income (in the numerator) is also knovm as profit or net earnings. Sales revenue is the denominator however, revenue or sales could be used instead. 

In many industries, the provision of spare parts and associated services represents a significant component of supply chain profits. Some studies [23] estimate US sales of spare parts and after-sales services to be 8% of the annual gross domestic product (GDP) or 1 trillion. Others [28] surest, for example, that in 2001, General Motors earned relatively more profits from its 9 billion in after-sales revenues than it did from 150 billion in car sales. Another estimate [124] suggests that the total cost of ownership of a product may far exceed the amount spent on the initial product purchase and may vary between five and twenty times the original product cost. The main conclusion from these studies is that managing spare parts supply chains and related services after a product is sold may have a significant impact on both primary demand as well as on profits. 

Having completed an estimate for the total permanent investment, Cjpi, in Table 16.9, of a proposed plant, it remains to estimate the total annual sales revenue, S, the total annual production cost, C, and the annual pre-tax and after-tax earnings. This includes the development of the so-called Cost Sheet. Then the working capital can be estimated and added to the total permanent investment to give the total capital investment for the plant, as shown in Table 16.9. These provide the ingredients for an approximate measure of economic goodness, called the return on investment, defined by... 

The annual pre-tax earnings or profit, also called the gross earnings or profit, is the difference between the annual sales revenue and the annual product cost ... 

Biogas production [9]. It has been estimated that the installation of a plant to produce biogas from human waste has a negative NPV of 2.8 million in an evaluation horizon of 8 years and at an annual interest rate of 6 %. To make the installation profitable, the project engineer proposes to sell dry biol as fertilizer, which requires an additional investment of 600,000 for the purchase of two thickeners, 2.2 million for the installation of dryers, and 1,000,000 for the purchase of additional land. Further, it will be necessary to hire an extra worker at a salary of 5,000 per month. This is expected to earn extra revenue of 1.96 million per year. Determine the NPV resulting from the sale of the dry biol fertilizer coupled with biogas production. 

Earnings before Interest Sales Revenue ROA =-------— ---------------X —7 --------= Profit Margin X Asset Turnover... 

Around the turn of the past century, a number of financial scandals surfaced when several well-known, publicly held "Internet" companies declared bankruptcy after years of reporting constantly rising earnings. How could this happen It turns out that questionable (if not fraudulent) accounting practices were used to hide losses or to report loans as sales revenues. We are not likely to see such manipulation go unnoticed in our industry because manufacturing is well known to be a cyclical business. Stock analysts would... 

Each product s net earnings (net sales revenues—per the first item above—minus manufacturing and overhead costs). 

The percentage of the product earnings of the total company earnings. The product s "contribution coefficient" (a value obtained by dividing the percentage of its net earning by its sales revenues). 

It can be pointed out that Foley implicitly embraces a single swap approach to the circuit of money. He assumes that capitalists must advance as money capital the total value of output, which once sold earns the precise amount of revenue required to recover the outlay. This is seen most clearly in equation (5.1), where the money capital advance is equal to the total sales of all capital and consumption goods. In Chapter 4 we saw that this approach, associated with Seccareccia (1996), has been heavily criticized by Nell (2004) for overestimating the amount of money required to oil the circuit of money - a serious miscalculation since it is important to know the precise borrowing requirements placed on the financial system. 

The break-even point can be where you start seeing some profit to your venture. After you ve reached the point where increased sales will start making you some money, you earn profit. The amount of the profit is determined by subtracting the cost from the revenue. P = R-C. What level of sales will earn a particular amount of profit ... 

The owners funds, or equity, include the issued capital (i.e. the face value of the company s shares), capital reserves (funds received in ways distinct from operating profits, such as premiums on the sale of shares) and revenue reserves, which are the accumulated annual profits earned. The long-term loans include not only the sums borrowed from hanks and finance houses as well as bonds issued by the company, but also the provisions for future potential (but as yet unknown) costs for example the sums a company involved in asbestos liability litigation would prudently set aside against possible penalties and costs. Current liabilities include all bills received but not yet paid (for goods and services), and any short-term loans, due within a year, such as bank overdrafts. 

The most popular statement is the income statement, also referred to as the profit and loss statement. This statement reflects the results of all business transactions over a period of time and is a summary of all the firm s earned revenue, i.e., income from sales and services less all expenses incurred, i.e., costs associated with the earning process. The income statement usually covers a specific period of time selected by the firm, generally called a fiscal period. The fiscal period basically describes a business year, e.g., beginning on May 1, 2002, and ending on April 30, 2003. Many firms use a calendar year extending from January 1 to December 31 of the same year as their fiscal year. 

Given that the payments made to the O M contractor are likely to be a small fraction of the revenues earned by the project as a whole from electricity sales, It is not usually possible to secure damages from the O M contractor for failure to achieve set performance targets for ouput (ie efficiency and availability) which are... 

The revenues for a project are the incomes earned from sales of main products and byproducts. 

Profitability is the difference of the revenue earned and the cost incurred. Revenue is obtained from the sale of product to the market (Ypi), treated waste to the market (Ytwi) and untreated waste to the neighboring plant (Yuwi)- Cost is incurred from the investment of the process and waste treatment unit as well as the cost of operation (i.e. cost of feed streams, cost of disposal of treated and untreated waste, cost of recycling treated and untreated waste). Profit, lEcP and lEvP for the IE with 6 plants are as follows ... 

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