Revenue can be recognized in different periods than the cash or payment for the revenues are received (under accural accounting), so it’s important to distinguish in our forecasts when revenue is recognized and when cash or payments are received. The calculation of revenues often distinguishes between Gross Revenues and Net Revenues, net revenues reflected the revenues after accounting for discounts, returns, chargebacks, affiliates, or other contra-revenues. Revenues can be reported divided up into different business activities, or by different departments or regions, in the effort to provide more information and transparency into how a business operates. Revenues measure the money that is brought into a company from its business activities, often called sales. Here’s an overview of the basic structure of the income statement. The income statement is usually the report that draws the most attention, and since each component of the statement shines light into different parts of the business’s performance, it’s worth explaining the details of the statement to understand what the different terms mean. Here's a detailed look at consolidated financial statements, how to understand them, and the role they play in financial projections.įollowing up on the introduction to finance and accounting, here’s a deeper dive into the three statements of the consolidated financial statements.
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