Accounting / July 9, 2018 / Justice Buckley
In the context of corporate financial reporting, the income statement summarizes a company's revenues (sales) and expenses, quarterly and annually for its fiscal year. The final net figure, as well as various other numbers in the statement, are of major interest to the investment community.
For example, assume ABC Corp has a return on investment of $1,000,000, an interest expense of $2,000,000 and average earning assets of $10,000,000. ABC Corp's net interest margin would then be -10%. This reflects the fact that ABC Corp has lost more money due to interest expenses than it's earned from investments. In this case, ABC Corp would have fared better had it used the investment funds to pay off debts rather than to make this investment.
We Also Think You’ll Like