金融概念

暑期实习
1.EBIT，全称Earnings Before Interest and Tax，即息税前利润，从字面意思可知是扣除利息、
所得税之前的利润。

计算公式有两种，EBIT=净利润+所得税+利息，或EBIT=经营利润+投资收益+营业外收入－营业外支出+以前年度损益调整。

2.EBITDA，全称Earnings Before Interest, Tax, Depreciation and Amortization，即息税折旧摊
销前利润，是扣除利息、所得税、折旧、摊销之前的利润。

计算公式为EBITDA=净利润+所得税+利息+折旧+摊销，或EBITDA=EBIT+折旧+摊销。

3.The special items – comprising effects that are non-recurring or do not regularly recur or
attain similar magnitudes – are detailed in the following table. “ebitda,” “ebitda before special items” and “ebit before special items” are not defined in the International Financial Reporting Standards and should therefore be regarded only as supplementary information.
The company considers ebitda before special items to be a more suitable indicator of operating performance since it is not affected by depreciation, amortization, impairments or special items. By reporting this indicator, the company aims to give readers a clearer picture of the results of operations and ensure greater comparability of data over time. The ebitda margin before special items, which is the ratio of ebitda before special items to sales, serves as a relative indicator for the internal and external comparison of operational earning power.
4.Special items非经常发生项，并没有在国际标准报表中呈现，是自己的项目；公司认为
EBITDA before special items是一个更合适的指标，因为它不受折旧、摊销、损益的影响。

5.IFRS，International Financial Reporting Standards 国际财务报告准则；
6.Generally Accepted Accounting Principles是一般公认会计原则，1937年美国会计程序委员
会（CAP）发表第一号会计研究公告，开创了由政府机关或行业组织颁布“一般通用会计”的先河。

7.周转率=销售收入占应收账款的比重；
应收账款如果越多，占得比重越高（周转率越小、周转天数越大），说明下游企业的钱收不上来，企业愿意延长下游企业的还款时间，行业不景气；
8.为什么看毛利？
毛利是企业的销售收入和生产成本相互作用的结果，是衡量企业长期经营能力的重要指标。

相比营业利润、净利润等指标，它们包含营业外收入支出，其中企业可以通过卖房等手段增加当年的净利润，所以受影响程度比较大，并且每个企业的经营状况不一样，有的企业三费高，会影响我们对企业盈利能力的判断。

三费=销售费用+管理费用+财务费用
毛利润=（销售收入-销售成本）/销售收入，主要看产品销售时的盈利能力，毛利平稳，毛利增加，毛利减少，都可以很直观的看出公司最近产品的盈利能力。

营业利润=销售收入-销售成本+其他业务收入-其他业务成本-三大费用-营业税金，看公司整体日常经营业务的盈利能力，看看销售贡献出来的毛利，是不是被三大费给吃完了，公司的日常运营成本是比较合理还是太高了。

还可以看看公司有没有其他利润的来源，比如有房产的公司可以出租场所来赚点其他业务收入。

这是公司日常经营时应该要保证的一个平稳的数字。

利润总额=营业利润+营业外收入-营业外支出，看公司整体的盈利，有没有被各种意外抢走利润，比如赔偿，罚款。

利润总额变动过大会影响日常经营的成果，和公司的稳定性也有关系。

净利润=利润总额-所得税费用，最后可以分配给股东的钱。

国外采用的指标EBIT，即息税前利润。

9.化工行业的行情已经持续了一年半左右的时间，像化工、石油、机械这些板块都具有很
强的周期性（从需求旺盛，到资金流入，到扩大生产，到产能过剩），所以现在寻找一些具备较强成长性的小票。

1.相同类别的信息要放在一块，公司情况、产能、下游产品、市场情况；
2.对其它公司的研究报告中的“年份、月份时间”、“预测”等类字眼要敏感，出现的话说明你用的是别人的报告；
3.对于年报中，报告期等字眼要敏感，不要出现此类字眼；
4.对于市场中的产品的价格等要敏感，要么不写，要么更新至最新的数据；
5.做完之后检查一遍内在逻辑框架；
上海主板股票代码：600XXX
深圳主板股票代码：000XXX
深圳中小板股票代码：002XXX
创业板股票代码：300XXX
新三板股票代码：83XXXX或43XXXX
中关村老三板：退市的企业股份继续流通的场所
主板入市要求：连续三年盈利，累计盈利超过3000万人民币，1990-2017共有1600家左右企业在主板上市；
创业板入市要求：持续经营三年；
新三板企业多为高科技创新型新企业，持续经营满两年可上市，无盈利门槛限制；
三板的股票流通性不高，通常的概念里不包括三板
主板：上市的企业具有下列特点：市场占有率高、规模较大、基础较好、高收益、低风险的大型优秀企业。

中小板：主要服务于即将或已进入成熟期、盈利能力强、但规模较主板小的中小企业。

创业板：是以自主创新企业及其他成长型创业企业为服务对象，主要为“两高”、“六新”企业，即高科技、高成长性、新经济、新服务、新农业、新能源、新材料、新商业模式企业。

新三板：主要为创新型、创业型、成长型中小微企业发展服务。

（实际情况则比较乱）
相同的股票，更全面的数据，更新颖的逻辑，更详实的内容得出最正确的预测结果，等待结果被验证。

少数股东权益：简称少数股权。

在母公司拥有子公司股份不足100%，即只拥有子公司净资产的部分产权时，子公司股东权益的一部分属于母公司所有，即多数股权，其余一仍属外界其他股东所有，由于后者在子公司全部股权中不足半数，对子公司没有控制能力，故被称为少数股权。

①没有达到控股比例的公司股东权益，即公司51%以上控股权益外的其他股东权益。

②公司股东在未完全控股的分公司、子公司中的权益。

在合并附属公司的财务报表时，附属公司中的非本公司股份权益被认同为公司对外负债。

账面价值( 账面净值)（carrying value、book value）是指按照会计核算的原理和方法反映计量的企业价值。

《国际评估准则》指出，企业的账面价值,是企业资产负债表上体现的企业全部资产(扣除折旧、损耗和摊销)与企业全部负债之间的差额，与账面资产、净值和股东权益
公允价值（Fair Value）亦称公允市价、公允价格。

熟悉市场情况的买卖双方在公平交易的条件下和自愿的情况下所确定的价格，或无关联的双方在公平交易的条件下一项资产可以被买卖或者一项负债可以被清偿的成交价格。

在公允价值计量下，资产和负债按照在公平交易中，熟悉市场情况的交易双方自愿进行资产交换或者债务清偿的金额计量。

购买企业对合并业务的记录需要运用公允价值的信息。

在实务中，通常由资产评估机构对被并企业的净资产进行评估。

商誉通常是指企业在同等条件下，能获得高于正常投资报酬率所形成的价值。

这是由于企业所处地理位置的优势、或是由于经营效率高、历史悠久、人员素质高等多种原因，与同行企业比较，可以获得超额利润。

表观消费量是指当年产量加上净进口量（当年进口量减出口量）。

非同一控制下企业合并：企业合并可以分为同一控制下企业合并与非同一控制下企业合并，而同一控制下的企业合并实质上是同一集团下企业财产与资源的重新分配。

所以严格意义上的企业合并应该指的是非同一控制下企业合并。

逆回购央行逆回购是指中国人民银行向一级交易商购买有价证券，并约定在未来特定日期将有价证券卖还给一级交易商的交易行为。

就是获得质押的债券，把钱借给商业银行。

目的主要是向市场释放流动性，当然，同时可以获得回购的利息收入。

操作就是央行把钱借给商业银行，商业银行把债券质押给央行，到期的时候，商业银行还钱，债券回到商业银行账户上。

在岸人民币汇率：指中国大陆的人民币即期汇率，由中国人民银行授权中国外汇交易中心公布。

由于在岸市场实施的强制结汇制度，以及央行在银行间外汇市场扮演的特殊角色，在岸人民币汇率并不能反映市场供需，而是一个受管控的汇率。

离岸人民币汇率：所谓离岸人民币市场，是指中国大陆之外，可经营人民币存、放款业务的市场。

目前最活跃的人民币离岸市场在香港，其他如新加坡、伦敦、台湾也在积极争取人民币离岸中心的角色。

香港人民币市场存在即期汇率、远期可交割合约（DF）与远期不可交割合约（NDF）三种汇率，这里主要研究的是即期汇率。

通常国外希望人民币大幅升值，而国内正好相反，所以离岸汇率高于在岸汇率。

1.Cost of debt 借贷成本；
2.Equity: the capital that a company has from shares rather than from loans;
3.WACC 加权平均资本成本公司从外部获取资金的来源主要有两种：股权和债务。

因此
一个公司的资本结构主要包含三个成分: 优先股，普通股和负债（常见的有债券和期票）。

加权平均资本成本考虑资本结构中每个成分的相对权重并体现出该公司的新资产的预期成本。

4.Discount rate 贴现率
5.NPV or NPW (Net Present Value) (Net Present Worth)净现值is a measurement of profit
calculated by subtracting the present values (PV) of cash outflows (including initial cost) from the present values of cash inflows over a period of time.
NPV/NPW = cash inflows (present values) – cash outflows (present values)
6.APV (Adjusted Present Value) The adjusted present value is the net present value (NPV) of a
project or company if financed solely by equity plus the present value (PV) of any financing benefits, which are the additional effects of debt. By taking into account financing benefits, APV includes tax shields such as those provided by deductible interest.
7.FTE (FTE/Free Cash flow to Equity) is a metric of how much cash can be distributed to the
equity shareholders of the company as dividends or stock buybacks—after all expenses,
reinvestments, and debt repayments are taken care of. Whereas dividends are the cash flows actually paid to shareholders, the FCFE is the cash flow simply available to shareholders.
8.time value of money is the greater benefit of receiving money now rather than later. It is
founded on time preference.
9.DCF (Discounted cash flow) is a method of valuing a project, company, or asset using the
concepts of the time value of money. All future cash flows are estimated and discounted by using cost of capital to give their present values (PVs). The sum of all future cash flows, both incoming and outgoing, is the net present value (NPV), which is taken as the value of the cash flows in question.
10.American call and European call看涨期权又称认购期权、买进期权、购买期权、买方期
权、买权、延买期权，或敲进期权。

看涨期权是指在协议规定的有效期内，协议持有人按规定的价格和数量购进股票的权利。

期权购买者购进这种买进期权，是因为他对股票价格看涨，将来可获利。

购进期权后，当股票市价高于协议价格加期权费用之和时(未含佣金)，期权购买者可按协议规定的价格和数量购买股票，然后按市价出售，或转让买进期权，获取利润；当股票市价在协议价格加期权费用之和之间波动时，期权购买者将受一定损失；当股票市价低于协议价格时，期权购买者的期权费用将全部消失，并将放弃买进期权。

因此，期权购买者的最大损失不过是期权费用加佣金。

期权分为欧式期权和美式期权。

美式期权的买方可以自期权契约成立之日起，至到期日止，这一期间内的任一时点，随时要求期权的卖方执行合约。

而欧式期权的履约时间只有到期日当天而已，其被要求履约的机率远低于美式期权。

11.Internal rate of return (IRR) is a method of calculating rate of return. The term internal refers
to the fact that its calculation does not involve external factors, such as inflation or the cost of capital.
0 = P0 + P1/(1+IRR) + P2/(1+IRR)2 + P3/(1+IRR)3 + . . . +Pn/(1+IRR)n
where P0, P1, . . . Pn equals the cash flows in periods 1, 2, . . . n, respectively;
12.When a company issues more debt, the tax shield on debt increases, the agency costs on
debt
13.可转换债券转换价格是与可转换债券的面值和转换比例相联系的，由于转换比例是一定
面值可转换债券可换成普通股票的股数，所以转换价格就是可转换债券面值与转换比例的比值，用公式可表示为：转换价格＝可转换证券面值/转换比例
比如，设一可转换债券的面值为100元，转换比例为4(即一张可转换债券规定可转换成4股)，则转换价格为25元。

实际上，在转换价格和转换比例二者中，只要规定了其中的一个，另一个也就随之决定了。

14.Rights offering A rights offering is a group of rights offered to existing shareholders to
purchase additional stock shares, known as subscription warrants, in proportion to their
existing holdings. In a rights offering, the subscription price at which each share may be purchased is generally discounted relative to the current market price. Rights are often
transferable, allowing the holder to sell them in the open market.
15.Outstanding shares Outstanding shares refer to a company's stock currently held by all its
shareholders, including share blocks held by institutional investors and restricted shares
owned by the company’s officers and insiders. Outstanding shares are shown on a company’s balance sheet under the heading “Capital Stock.” The number of outstanding shares is used in calculating key metrics such as a company’s market capitalization, as well as its earnings per share (EPS) and cash flow per share (CFPS)
16.Market capitalization Market capitalization refers to the total dollar market value of a
company's outstanding shares. Commonly referred to as "market cap," it is calculated by multiplying a company's shares outstanding by the current market price of one share. The investment community uses this figure to determine a company's size, as opposed to using sales or total asset figures.
17.Rights A rights issue is an invitation to existing shareholders to purchase additional new
shares in the company. More specifically, this type of issue gives existing shareholders
securities called "rights," which give the shareholders the right to purchase new shares at a discount to the market price on a stated future date. Essentially, the company is giving
shareholders a chance to increase their exposure to the stock at a discount price.
Until the date at which the new shares can be purchased, shareholders may trade the rights on the market the same way they would trade ordinary shares. The rights issued to a
shareholder have a value, thus compensating current shareholders for the future dilution of their existing shares' value.
18.Underinvestment problem The firm financed with risky debt will, in some states of nature,
pass up valuable investment opportunities — opportunities which could make a positive net contribution to the market value of the firm." Also known as the "debt overhang problem,"
the underinvestment problem moves into focus when a firm frequently passes up net
positive NPV projects because the managers, acting on behalf of shareholders, believe that creditors would benefit more than owners. If cash flows from a prospective investment go to creditors, then there would be no incentive to equity holders to proceed with the investment.
Such an investment would increase the overall value of the firm, but it does not happen — hence, there is a "problem."
19.Bankruptcy costs can also significantly affect a company's cost of capital. When a company
invests in debt, the company is required to service the debt by making required interest
payments. Interest payments alter a company's earnings as well as cash flow. For each
company there is an optimal capital structure, including a percentage of debt and equity, a balance between the tax benefits of the debt and the equity. As a company continues to
increase its debt over the amount stated by the optimal capital structure, the cost to finance the debt becomes higher as the debt is now riskier to the lender. The risk of bankruptcy
increases with the increased debt load. Since the cost of debt becomes higher, the WACC is thus affected. With the addition of debt, the WACC will at first fall as the benefits are realized, but once the optimal capital structure is reached and then surpassed, the increased debt load will then cause the WACC to increase significantly.
20.FCF (Free Cash Flow) By establishing how much cash a company has after paying its bills for
ongoing activities and growth, FCF is a measure that aims to cut through the arbitrariness and "guesstimations" involved in reported earnings. Regardless of whether a cash outlay is counted as an expense in the calculation of income or turned into an asset on the balance sheet, free cash flow tracks the money.
Net income
+ Depreciation/Amortization
- Change in Working Capital
- Capital Expenditure
----------------------------
= Free Cash Flow
It might seem odd to add back depreciation/amortization since it accounts for capital spending. The reasoning behind the adjustment is that free cash flow is meant to measure money being spent right now, not transactions that happened in the past. This makes FCF a useful instrument for identifying growing companies with high up-front costs, which may eat into earnings now but have the potential to pay off later.
Growing free cash flows are frequently a prelude to increased earnings. Companies that experience surging FCF - due to revenue growth, efficiency improvements, cost reductions, share buy backs, dividend distributions or debt elimination - can reward investors tomorrow.
That is why many in the investment community cherish FCF as a measure of value. When a firm's share price is low and free cash flow is on the rise, the odds are good that earnings and share value will soon be heading up.
By contrast, shrinking FCF signals trouble ahead. In the absence of decent free cash flow, companies are unable to sustain earnings growth. An insufficient FCF for earnings growth can force a company to boost its debt levels. Even worse, a company without enough FCF may not have the liquidity to stay in business.
21.R&D Research and Development refers to the work a business conducts toward the
innovation, introduction and improvement of its products and procedures. Simply, it is a
series of investigative activities to improve existing products and procedures or to lead to the development of new products and procedures.
22.Return on equity (ROE) is the amount of net income returned as a percentage of
shareholders' equity. Return on equity (also known as "return on net worth" [RONW])
measures a corporation's profitability by revealing how much profit a company generates with the money shareholders have invested.
ROE is expressed as a percentage and calculated as:
Return on Equity = Net Income/Shareholder's Equity
Net income is for the full fiscal year (before dividends paid to common stockholders but after dividends to preferred stock.) Shareholders' equity does not include preferred shares.
23.PV (Profit-Volume Chart) A profit-volume (PV) chart is a graphic that shows the earnings (or
losses) of a company in relation to its volume of sales. Companies can use profit-volume (PV) charts to establish sales goals, analyze whether new products are likely to be profitable, or estimate breakeven points.
24.An annuity is a periodic or immediate payment to begin at a specific date for a fixed period
or for the rest of the policy owner's life. Simply put, an annuity is a vehicle for liquidating a sum of money. Annuities have received a bad reputation in the last few years because of
advisors abusing them for high commission payouts. They can however, be a very useful tool in saving for retirement and accomplishing savings goals.
25.Perpetuity refers to an infinite amount of time. In finance, perpetuity is a constant stream of
identical cash flows with no end. The present value of a security with perpetual cash flows can be determined as:
26.Decoupling is the occurrence of returns on asset classes diverging from their expected or
normal pattern of correlation. Decoupling takes place when two different asset classes that typically rise and fall together move in opposite directions, such as one increasing and the other decreasing. For example, stock and corporate bond returns generally move together. If the stock returns were to increase while the bond yields decreased, decoupling would have occurred.
27.Revenue：通过销售商品、提供服务等主营活动取得的收入，毛收入、总收入，位于收
入报表的顶端。

Gain：外围活动产生的结果，比如销售旧的运输卡车而获得gain。

Gain是收到的、超出账面价值的部分。

比如一家公司因卖掉卡车而收到24000块，卡车的账面价值是4000块，则gain是20000块。

Income：revenue 减去费用之后的收入，算是净收入bottom line，位于收入报表的末端28.费用expense:主要指与主营业务没有直接联系的费用支出，不可以直接归结到某个产品
上去，因为它的耗用是在产品生产过程中因为管理等等产生的消耗。

有:管理费用,财务费用,产品销售费用等
成本cost:指的是与主营业务相关的支出，可以直接归结到产品中去的生产耗用，一般包括有直接人工，直接材料等:如生产成本(原材料,直接人工工资,间接成本_制造费用等）。

29.In the United States, the federal funds rate is the interest rate at which depository
institutions (banks and credit unions) lend reserve balances to other depository institutions overnight, on an uncollateralized basis. Reserve balances are amounts held at the Federal Reserve to maintain depository institutions' reserve requirements. Institutions with surplus balances in their accounts lend those balances to institutions in need of larger balances. The federal funds rate is an important benchmark in financial markets.
30.The implied repo rate is the rate of return that can be earned by simultaneously selling a
bond futures or forward contract, and then buying an actual bond of equal amount in the
cash market using borrowed money. The bond is held until it is delivered into the futures or forward contract and the loan is repaid.
31.Bond futures are financial derivatives which obligate the contract holder to purchase or sell a
bond on a specified date at a predetermined price. A bond future can be bought in a futures exchange market and the prices and dates are determined at the time the future is
purchased.
32.A portfolio is a grouping of financial assets such as stocks, bonds, commodities, currencies
and cash equivalents, as well as their fund counterparts, including mutual, exchange-traded and closed funds. A portfolio can also consist of non publicly tradable securities, like real
estate, art, and private investments. Portfolios are held directly by investors and/or managed by financial professionals and money managers. Investors should construct an investment
portfolio in accordance with their risk tolerance and their investing objectives. Investors can also have multiple portfolios for various purposes. It all depends on one's objectives as an investor.
33.Systematic risk is the risk inherent to the entire market or market segment. Systematic risk,
also known as “undiversifiable risk,” “volatility,” or “market risk,” affects the overall market, not just a particular stock or industry. This type of risk is both unpredictable and impossible to completely avoid. It cannot be mitigated through diversification, only through hedging or by using the correct asset allocation strategy.
34.Volatility is a statistical measure of the dispersion of returns for a given security or market
index. Volatility can either be measured by using the standard deviation or variance between returns from that same security or market index. Commonly, the higher the volatility, the
riskier the security.
35.A contra account is an account used in an account ledger to reduce the value of a related
account. A contra account's natural balance is opposite of the associated account. If a debit is recorded in a related account, the contra account record also records a credit.
Contra accounts are reported on the same financial statement as the associated account. For example, a contra account associated with accounts receivable is referred to as a contra asset account which is reported on the balance sheet immediately below the asset account to
which it relates, and reduces the net reported value of the asset account.
36.An allowance for doubtful accounts is a contra-asset account that reduces the total
receivables reported to reflect only the accounts receivable expected to be collected. The
allowance is established by recognizing a bad debt loss on the financial statements in the
same accounting period when the associated sale is reported.
37.合并利润表应当以母公司和子公司的利润表为基础，在抵销母公司与子公司、子公司相
互之间发生的内部交易对合并利润表的影响后，由母公司合并编制。

编制合并利润表时需要进行抵销处理的项目主要有：（1）内部营业收入和内部营业成本项目；（2）内部销售商品形成存货、固定资产、无形资产等项目中包含的未实现内部销售损益；（3）内部销售商品形成固定资产、无形资产等项目折旧额及摊销额中包含的未实现内部销售损益；
（4）内部应收款项计提的坏账准备以及内部销售商品形成存货、固定资产、无形资产等计提的资产减值准备中包含的未实现内部销售损益；（5）内部投资收益项目，包括内部利息收入与利息支出项目、内部股权投资的投资收益项目等。

38.Goodwill is an intangible asset that arises when one company purchases another for a
premium value. The value of a company’s brand name, solid customer base, good customer
relations, good employee relations ,and any patents or proprietary technology represent goodwill.
Goodwill is considered an intangible asset because it is not a physical asset like buildings or equipment. The goodwill account can be found in the assets portion of a company's balance sheet.
39.Treasury stock is outstanding stock repurchased from stockholders by the issuing company.
These shares are issued but not outstanding and are not included in the calculation of
dividends or earnings per share (EPS)
40.蓝筹股（blue chip）：某一行业中处于重要支配地位，业绩优良，红利优厚的大公司股票，
一般是国家的支柱产业，公司流通市值很高，不容易被少数投资者操控，不论市场环境好坏，都有稳定创造利润的能力，盈利要能保持增长，股价保持较为稳定，但是在中国的股市环境中，蓝筹股还是会受到一定的影响。

41.Systematic risk is the risk inherent to the entire market or market segment. Systematic risk,
also known as “undiversifiable risk,” “volatility,” or “market risk,” affects the overall market, not just a particular stock or industry. This type of risk is both unpredictable and impossible to completely avoid. It cannot be mitigated through diversification, only through hedging or by using the correct asset allocation strategy. Systematic risk, however, incorporates interest rate changes, inflation, recessions and wars, among other major changes. Shifts in these domains have the ability to affect the entire market and cannot be mitigated by changing around positions within a portfolio of public equities.
42.协方差（Covariance）在概率论和统计学中用于衡量两个变量的总体误差。

而方差是协
方差的一种特殊情况，即当两个变量是相同的情况。

43.Accrued expense An accrued expense is an accounting expense recognized in the books
before it is paid for. It is a liability, and is usually current. These expenses are typically
periodic and documented on a company's balance sheet due to the high probability that they will be collected.
Accrued expenses are the opposite of prepaid expenses. Firms will typically incur periodic expenses such as wages, interest and taxes. Even though they are to be paid at some future date, they are indicated on the firm's balance sheet from when the firm can
reasonably expect their payment, until the time they are paid.
44.regression coefficient定义：回归分析中度量依变量对自变量的相依程度的指标,它反映当
自变量每变化一个单位时,依变量所期望的变化量
45.负债税盾，指的是由于债务利息在税前支付，从而可产生更多实际利润的债务的抵税作
用。

非负债税盾，指的是企业的固定资产折旧、无形资产摊销及长期待摊费用摊销等均可在税前列支，它们同债务利息一样具有抵税作用，通常称这类虽非负债但同样具有抵税作用的因素为“非负债税盾”
46.Non-controlling interest Non-controlling interest (NCI), also known as minority interest, is an
ownership position whereby a shareholder owns less than 50% of outstanding shares and has no control over decisions. Non-controlling interests are measured at the net asset value of entities and do not account for potential voting rights.
47.Unearned revenue is money received by an individual or company for a service or product
that has yet to be fulfilled. Unearned revenue can be thought of as a "prepayment" for goods or services that a person or company is expected to produce for the purchaser. As a result of
this prepayment, the seller has a liability equal to the revenue earned until delivery of the good or service.
48.Retained earnings are the cumulative net earnings or profit of a firm after accounting for
dividends and are sometimes referred to as the earnings surplus. Retained earnings are the net earnings after dividends that are available reinvestment in the company's core business or to pay down its debt. It is recorded under shareholders' equity on the balance sheet. The formula calculates retained earnings by adding net income to or subtracting any net losses from, beginning retained earnings and subtracting any dividends paid to shareholders.
49.Difference between retained earnings and revenue
You can see both retained earnings and revenue listed on a company's financial statements. Both figures can be compared with other firms in the same industry to provide a measure of performance. Revenue is the money that a business receives from the sale of goods and the provision of services. Expenses are not taken into account when calculating revenue. Retained earnings take revenue and subtract out the cost of business operations, leaving the earnings, some of which must be paid out in dividends to shareholders. The net earnings that are not paid out to shareholders represents the profit that the company
actually holds onto, which explains how a company has approached reinvestment.
Retained earnings start with revenue, and the calculations between the two are performed by accountants when the corporate books are closed at the end of a reporting period. Revenue is part of the income statement, sometimes called the profit and loss
statement, constituting the top line before deductions are made. You can find retained
earnings on the balance sheet, where there is an entry made for the sum of all retained
profits minus all losses since the company began operations.
Even though retained earnings are a more detailed and complicated entry, revenue can still be valuable as a stand-alone figure. This is particularly true when comparing two similar firms, since revenue is an expression of how successfully a company appeals to and retains customers. Over time, revenue sheds light on sales trends, market share and income
potential.
It is also important to understand differences between methods of recognizing revenue.
The amount of revenue listed on a balance sheet or income statement does not necessarily reveal how many funds actually flowed into the company during that period. For example, accrual-based recognition reports the income when it is earned, not when the company receives it.
The relationship between revenues and retained earnings is very telling, particularly for shareholders of the company. The ratio between the two can tell you how a company
handles excess money after expenses, how efficient it is in its business operations, whether it is hoarding large amounts of cash, and possibly whether the firm is being too aggressive or too conservative with its potential investments or capital expansion.。