Glossary: M02 Income Statements

TermDefinition
RevenueInflows from delivering goods or services in ordinary business activities
Net RevenueRevenue after deducting returns, allowances, and discounts
Cost of Goods Sold (COGS)Direct costs attributable to production of goods sold
Gross ProfitRevenue minus COGS
Operating ExpensesCosts of running the business excluding COGS (SGA, R&D, D&A)
Operating IncomeGross profit minus operating expenses (EBIT)
EBITEarnings Before Interest and Taxes
EBITDAEarnings Before Interest, Taxes, Depreciation, and Amortization
Non-operating IncomeIncome from activities outside core operations (interest, investment gains)
Pretax Income (EBT)Income before income tax expense
Net IncomeBottom-line profit after all expenses and taxes
Earnings Per Share (EPS)Net income available to common shareholders divided by weighted average shares
Basic EPSEPS using actual weighted average shares outstanding
Diluted EPSEPS assuming all dilutive securities are converted/exercised
Weighted Average Shares Outstanding (WASO)Time-weighted number of common shares during the period
Treasury Stock MethodMethod to calculate dilutive shares from options/warrants; assumes proceeds buy back shares at market price
If-Converted MethodMethod to calculate dilution from convertible securities; assumes conversion at beginning of period
Other Comprehensive Income (OCI)Gains/losses bypassing the income statement (AFS securities, FX translation, pensions, hedges)
Comprehensive IncomeNet income plus OCI
Discontinued OperationsResults of a component that has been disposed of or classified as held for sale
Unusual or Infrequent ItemsItems that are unusual in nature or infrequent in occurrence, reported within continuing operations
Common-Size Income StatementEach line item expressed as a percentage of revenue
Single-Step Income StatementFormat grouping all revenues together and all expenses together
Multi-Step Income StatementFormat showing subtotals (gross profit, operating income)
Accrual AccountingRevenue/expenses recognized when earned/incurred regardless of cash timing