Total revenue

Ramsey prices The theory on price structures in a monopoly developed by Ramsey affects those monopolies that produce more than one type of product. Ramsey showed that the best way to share fixed costs and cause minimal welfare losses was not the non-linear pricing system described above instead, the rule he proposed consisted in increasing prices above the marginal cost in an inverse proportion to demand elasticities. Ramsey prices are therefore linear prices that fulfil the condition that total revenue equals total costs, and moreover minimize welfare losses. 

InterTechnology Corp. (7) analyzed the energy plantation concept, in which fast growing plant species are cultivated for biomass yield. For a plantation of hybrid poplar, total capital and operating costs in an unspecified U.S. location - from clearing the land to delivering wood chips - require a total revenue per oven dry tonne of 15.25 (in early 1975 dollars)(Table III). This assumes a 15% after-tax return on equity. The estimate is based on a yield of 20.2 oven dry tonnes per hectare. For a yield of 9... 

Breakdown of Capital and Operating Costs and Estimate of Total Revenue Required per Year for Deciduous Plant Material Grown on Energy Plantations Adapted from Reference (7)... 

Break-even chart An economic production chart depicting total revenue and total expenses as functions of operation of a processing facility. 

Gross margin (profit) Total revenue minus cost of goods manufactured. 

With these caveats in mind, 1 now briefly examine various ratios (Table 9.2). Rosenthal et al. (2002) report that while DTCA increased from 1.2% of total revenues in 1996 to 2.2% in 2000, over this same time period, hospital-based promotion and medical journal advertising decreased from 1.6% to 1.1 % of total revenues. Although the DTCA-to-sales ratio fell slightly in 2001 and 2002, by 2003, at 2.2%, its value is the same as in 2000. These numbers. 

Industry experts indicate a growth of 6% per year for the fine-chemical industry. This figure is based on an anticipated total revenue growth of 9% per year of the pharmaceutical industry, a third of which results from price... 

Assuming total revenues of EUR 235,000 in the first year of operation, revenue is likely to increase to EUR 2 mio in subsequent years until 2010 (Fig. 2). 

Finally, total revenue may be written in terms of M and the breakeven point by substituting Equation (11.2) into (11.1) ... 

Table 15-11 depicts the hospital s total patient revenues for fiscal year 2007. It also indicates the total expenses for the pharmacy department and the percentage of revenues consumed by the department. Although not shown in this exhibit, a revenue/expense report is generated every month so that the cost center s expenses as a percentage of total revenue can be monitored closely. 

The profit (or loss) account, which accompanies the balance sheet in the annual accounts, is a summary of the year s activities for the company in financial terms. Its main components are given in Table 1, which shows the progression from total revenue to net profit, and how each item is calculated. 

Given, then, the production rate and sales price, the total revenue for the project can be calculated (perhaps with allowance made for under-running in the first year or two as the faults are dealt with). It will cost money to get the product to market a sales force, advertising, cost of shipment and distribution, and so on. There may also be a royalty on sales payable to the owner of the technology used in the plant. These costs, generally called selling costs, are subtracted from the revenues to derive the sum that actually gets back to the project - the factory netback . 

The total production cost (variable plus fixed operating costs, overheads and depreciation) when subtracted from the factory netback (total revenues less selling costs) leads to an operating profit, often called gross profit , but more correctly profit before interest and tax (PBIT). From this, then, is subtracted the annual interest paid on the loans... 

From this table a number of key discoveries can be made. Firstly, the total net cash flow of 156 millions is close to twice the total investment, so there is a reasonable overall profit. However, the undiscounted payback time is about 5 years and 8 months (the total revenues for years 1-5 are still 10 millions short of covering the total costs). This is a long time before payback - 2 to 3 years would be preferable - so this project is beginning to look a little unexciting. 

The total revenue costs not to exceed 1,2 million euros... 

Income statements are generally completed on a monthly basis, especially in a pharmacy, because it is essential to keep track of the company s profitability in a timely manner in order to institute corrective actions when necessary. When total revenue exceeds total expenses over the period selected, the remaining positive amount reflects a net income (profit).When the opposite occurs and total expenses exceed total revenue, the result is a net loss. Table 9.3 presents a brief sample of an income statement. 

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