Net Profit Margin: Mathematical Explanation
Net profit margin is the percentage of revenue remaining after all operating expenses, interest, taxes and preferred stock dividends (but not common stock dividends) have…
Accounting
What is Net Income Margin?
Net income margin is the net after-tax income of a business, expressed as a percentage of sales. It is used in ratio analysis to determine…
Return on Equity Ratio: Mathematical Explanation
Return on equity or return on capital is the ratio of net income of a business during a year to its stockholders’ equity during that…
How Analyze Return on Equity?
Return on equity compares the annual net income of a business to its shareholders’ equity. The measure is used by investors to determine the general…
Income Statement: Mathematical Explanation
The income statement is one of the three primary financial statements used to assess a company’s performance and financial position (the two others being the…
How to Prepare an Income Statement?
The income statement presents the revenues, expenses, and resulting profit or loss of a business. Income Statement is a financial statement that measures a company’s financial performance…
What is Flexible Budget Performance Report?
A flexible budget performance report is used to compare actual results for a period to the budgeted results generated by a flexible budget. This report…
What is Return on Sales?
The return on sales is a ratio used to derive the proportion of profits generated from sales. The concept is useful for determining the ability…
What is Equity Accounts?
Equity accounts are the financial representation of the ownership of a business. Equity can come from payments to a business by its owners, or from…
What is the difference between Gross Margin and Operating Margin?
Gross margin measures the return on the sale of goods and services, while operating margin subtracts operating expenses from the gross margin. These two margins…
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