Net Revenues | Total dollar payment for goods and services that are credited to an income statement over a particular time period. |
Cost of Goods Sold (COGS) | Cost of Goods Sold represents a company’s direct cost of manufacture (for manufacturers) or procurement (for merchandisers) of a good or service that the company sells to generate revenue. |
Gross Profit | Revenues — Cost of Goods Sold |
Selling, General & Administrative (SG&A) | Operating costs not directly associated with the production or procurement of the product or service that the company sells to generate revenue. Payroll, wages, commissions, meal and travel expenses, stationery, advertising, and marketing expenses fall under this line item. |
Research & Development (R&D) | A company’s activities that are directed at developing new products or procedures. |
Earnings before Interest, Taxes, Depreciation & Amortization (EBITDA) | Gross Profit — SG&A — R&D. EBITDA is a popular measure of a company’s financial performance. |
Depreciation & Amortization (D&A) | The allocation of cost over a fixed asset’s useful life in order to match the timing of the cost of the asset to its expected revenue generation. |
Other Operating Expenses/Income | Any operating expenses not allocated to COGS, SG&A, R&D, D&A. |
Earnings before Interest & Taxes (EBIT) | EBITDA — D&A |
Interest Expense | Interest expense is the amount the company has to pay on debt owed. This could be to bondholders or to banks. Interest expense subtracted from EBIT equals earnings before taxes (EBT). |
Interest Income | A company’s income from its cash holdings and investments (stocks, bonds, and savings accounts). |
Unusual or Infrequent Income/Expenses | Gain (loss) on sale of assets, disposal of a business segment, impairment charge, write-offs, restructuring costs. |
Income Tax Expense | The tax liability a company reports on the income statement. |
Net Income | EBIT — Net Interest Expense — Other Nonoperating Income — Taxes |
Basic Earnings per Share (EPS) | Net income/Basic Weighted Average Shares Outstanding |
Diluted EPS | Net income/Diluted Weighted Average Shares Outstanding |