33:620:492 Lecture Notes - Lecture 7: Gross Margin, Earnings Before Interest And Taxes, Gross Profit
2 Apr 2016
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Document Summary
Types of raios: there are many types of raios, including the following commonly-used categories: Proit: proit: the amount let over ater expenses are subtracted from revenue, there are three basic types of proit: Gross proit: equals revenue minus cost of goods sold (cogs) or cost of services (cos) It is what is let over ater a company has paid the direct costs incurred in making the product or delivering the service. Operaing proit: equals gross proit minus operaing expenses. Also called earnings before interest and taxes ( ebit or eeh-bit ) It shows the proit made from running the business. Net proit: what"s let ater all costs and expenses are subtracted from revenue. Equals operaing proit minus: interest expenses, taxes, one-ime charges. Also called the botom line : each of the three types of proit is determined by subtracing certain categories of expenses from revenue, proit margins.
