Sunday, September 13, 2009

Income Statement Analysis

Income statement reflects the operational results of the company over a period of time. It matches the income and the expenditure Webmailtmnetmy the same period, and you can count the net profit in the period.

As a minimum, the face of the income statement should include:

1. revenue

2. finance costs

3. share of profits and losses of associates and joint ventures accounted for using the equity method

4. tax expense

5. a single amount comprising the post-tax profit or loss ktm malaysia discontinued operations

6. profit or loss of the period

7. minority interest

8. net profit or loss for the period.

You should know the figure changing when you're comprising the different period in the income statement. Here, you can consider the profitability, including the develop tendency of profitability: return on capital employed(ROCE), gross profit percentage, trading profit margin.

1. Return on capital employed(ROCE).

Return on capital employed(ROCE) = Profit/Capital employed*100%

The ratio shows how efficiently a business is using its resources.

2. mobile broadband coverage profit percentage.

Gross profit percentage = Gross profit/Sales revenue*100%

A company should keep enough gross profit percentage in its business.

3. Trading profit margin.

Trading profit margin = Trading profit(before interest, investment income and tax)/Sales revenue*100%

Trading profit is gross profit minus interest, investment income and tax. It can describe more accurately the trading performance.

According this, as a manager or a master, you can make more measure to increase it. But here, you should know control the cost of sales, then the gross profit, return on capital employed and trading profit can be increased really.

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