Copyright © Texas Education Agency, 2012. All rights reserved. Financial Operating Statement...

Copyright © Texas Education Agency, 2012. All rights reserved.

Financial Operating Statement

AnalysisStatistics & Risk

Management

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Copyright © Texas Education Agency, 2012. All rights reserved. 3

Sales and RevenuesSales are the funds received from the normal

products and services provided by an organization. –Cash Registers–Bank Deposits


Sales and Revenues

Additional Revenues result from Interest received, sales of assets, etc.–Bank Statements–Contracts

Accrual Basis: Recognized when EarnedCash Basis: Recognized when Received


Gross ProfitGross Profit is computed by subtracting the

direct costs of the sales from the sales Revenue.

Gross Income = Sales – Cost of Goods Sold


Gross Profit

Gross Profit is calculated so that management can understand what the sales of products generate in the area of profit.

Inventory plays into this, will cover that later.


Expense Summary

Compilation of Operating Expenditures

Fixed Expenses (Depreciation, Rent….)Variable Expenses (Wages, Utilities…)Excludes Purchases for Resale.


Depreciation & Amortized Expense

Used when the cash price is not expensed

out all at once. Buy a business vehicle for $50,000 that will

last 10 years. What is the cost per year assuming the vehicle will be junk in 10 years?

Buy a years insurance policy for $12,000. What is the expense per month?


Net Profit (or Loss)

Take the Gross Profit and subtract the Expenditures and you have the Net Profit (or Loss)


Using Ratios

Revenue Mix RatiosGross Profit RatiosExpense Mix RatiosExpense to Revenue Mix Ratios

Copyright © Texas Education Agency, 2012. All rights reserved. Financial Operating Statement...

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