Friday, November 28, 2014

Income Statement Ratios

Income Statement Ratios are all about margins. In fact, it is recommended to prepare a margin-based income statement (parallel to the ‘regular’ one). ‘Margin-based’ means that all items on this income statements are expressed as a percentage of gross sales. Financial (‘economic’) meaning of this statement is to show where exactly goes the money that your customer pays for your products and services.

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