Accounting / July 16, 2018 / Pearl Bailey
Net Sales These terms refer to the value of a company's sales of goods and services to its customers. Even though a company's bottom line (its net income) gets most of the attention from investors, the top line is where the revenue or income process begins. Also, in the long run, profit margins on a company's existing products tend to eventually reach a maximum that is difficult on which to improve. Thus, companies typically can grow no faster than their revenues.
This can be calculated as total sales (income) less the costs (expenses) directly related to those sales. Raw materials, manufacturing expenses, labor costs, marketing, and transportation of goods are all included in expenses.
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