Merch Strategies: Income Statements

Question 1

Income Statement

Answer 1

report card showing the profit and losses of the company during a fiscal year

Question 2

Fiscal year

Answer 2

12 months where businesses conduct accounting and financial reporting

Question 3

Revenue/ Net Sales

Answer 3

All the money generated from selling a good/ service (no costs/expenses taken into account)

Question 4

Cost of Good Sold (COGs) / Cost of Sales

Answer 4

How much it takes to make the product (direct costs) - materials

Question 5

Gross Profit

Formula

Answer 5

How much money you make on the product only taking into account the direct cost of the product

Formula:
Gross Profit = Revenue - COGS

Question 6

SG&A

Answer 6

Selling, general, and administrative expenses

Expenses directed to running the business - part of operating expenses

Question 7

Operating income

Formula

Answer 7

Companies profit after deducing operating expenses (only the SG&A expenses)

Formula:
Operating income = Gross Profit - SG&A

Question 8

Net Income/ Consolidated net income/ net earnings

Answer 8

all the sales minus all the expenses