| A | B |
|---|
| Total financial amount earned by the company through revenues for goods or services | Sales |
| The amount of money it cost the company to produce the goods or services sold. This includes the cost of raw materials, manufacturing and labour. This is subtracted from sales in order to arrive at the gross profit | Cost of Goods Sold (COGS) |
| After subtracting COGS from sales, you will have this sum | Gross Profit |
| These items include research and development, marketing, salaries and/or rent. Any normal expense incurred in the day-to-day operations of the company falls under this category | General Operating Expenses |
| The annual amount deducted from tangible assets (such as machinery), representing the life span of the machine in question | Depreciation |
| After subtracting the general operating costs and the depreciation from the gross profit, we arrive at this item | Operating Income |
| Items that that don't stem from the core operations of the business. This includes items such as capital gains (or losses) made from investments, foreign currency exchange or income from the rental of properties | Other Income |
| This represents profits or losses that do not occur on a regular or even yearly basis | Extraordinary Income |
| If a company does not have other and/or extraordinary incomes for a particular year, then this will be the same as operating income. Either way, this item shows the investor a company's ability to pay interest expenses (bonds/bank loans) with the income it has made for the year | Earnings Before Interest and Tax (EBIT) |
| This item is the amount the company has to pay on debt owed. This could be to bondholders or to banks. This subtracted from EBIT equals net earnings | Interest Expense |
| This figure is calculated because often companies will postpone payment on taxes. As such, it is the amount that a company has to use to pay taxes for that specific period of time | Net Profit Before Taxes (NPBT) |
| This refers to what all companies must pay. It is usually a percentage of income generated, and therefore will vary from year to year | Taxes |
| This is the money that is left over after all other duties have been paid | Net Profit After Taxes (NPAT) |
| If a company decides to distribute this to shareholders for a particular year, the amount is stated here. This amount is deducted from NPAT | Dividends Paid to Shareholders |
| These represent what's left after dividends are paid. This money is either used for future business ventures or invested back into the company for growth purposes | Retained Earnings |
