1、Business School of Nankai University,Unit7 Operating Statement of A Company,作者：南开大学商学院 李桂华,Business School of Nankai University,Glossary,wholesale: adj. Of, relating to, or engaged in the sale of goods in large quantities for resale批发的clarity: n. Clearness of thought or style; lucidity: 清晰readabilit
2、y: n. interesting or easy to read易读, 可读性concise: adj. Expressing much in few words; clear and succinct.简明的，简洁的inventory: n. The quantity of goods and materials on hand; stock.库存gross sales: 销售总额net sales: 扣除销货折扣和退货后净额cost of sales: 销售成本discount: n. A reduction from the full or standard amount of a p
3、rice or debt. 折扣net cost: 净价,Business School of Nankai University,Glossary,margin: n. The minimum return that an enterprise may earn and still pay for itself. 最低利润gross profit: 毛利,总利润,利益毛额sales salaries: 销售人员的工资advertising expense：广告费用office salaries：办公室或一般文秘人员工miscellaneous：adj. Made up of a variet
4、y of parts oringredients.混杂的seemingly: adv. Apparently; ostensibly. 表面上地skeleton: n. A supporting structure or framework. 构架invoice: n. A detailed list of goods shipped or services rendered, with an account of all costs; an itemized bill.发货清单refund: n. A repayment of funds. 退款cancellations: n. The a
5、ct or an instance of canceling. 取消,Business School of Nankai University,Key terms and Concepts,Operating Statement: The operating statement is a financial statement that summarizes the amount of revenues/profits earned and expenses incurred by a business over a period of time. Many people consider i
6、t the most important financial report because its purpose is to measure whether or not the business achieved or failed to achieve its primary objective of earning an acceptable income.Gross sales: The term gross sales is the total amount charged to all customers during some time period. However, the
7、re is always some customer dissatisfaction-or just plain errors in ordering and shipping goods. This results in returns and allowances-which reduce gross sales. A return occurs when a customer sends back purchased products. The company either refunds the purchase price or allows the customer dollar
8、credit on other purchases,Business School of Nankai University,Key terms and Concepts,Allowance: An allowance occurs when a customer is not satisfied with a purchase for some reason. The company gives a price reduction on the original invoice (bill), but the customer keeps the goods and services. Ne
9、t profit: Net profit-at the bottom of the statement-is what the company earned from its operations during a particular period. It is the amount left after the cost of sales and the expenses are subtracted from net sales. Net sales and net profit are not the same. Many firms have large sales and no p
10、rofits-they may even have losses! Thats why understanding costs-and controlling them-is important.,Business School of Nankai University,Text,Business students must become familiar with the essentials of the language of business. Businesspeople commonly use accounting terms when talking about costs,
11、prices, and profit. And using accounting data is a practical tool in analyzing marketing problems.An operating statement is a simple summary of the financial results of a companys operations over a specified period of time. Some beginning students may feel that the operating statement is complex, bu
12、t as well soon see, this really isnt true. The main purpose of the operating statement is determining the net profit figure-and presenting data to support that figure. This is why the operating statement is often referred to as the profit and loss statement.,Business School of Nankai University,Text
13、,Exhibit 5.1 shows an operating statement for a wholesale or retail business. The statement is complete and detailed so you will see the framework throughout the discussion, but the amount of detail on an operating statement is not standardized. Many companies use financial statements with much less
14、 detail than this one. They emphasize clarity and readability rather than detail. To really understand an operating statement, however, you must know about its components.The basic components of an operating statement are sales-which come from the sale of goods and services; costs-which come from th
15、e making and selling process; and the balance-called profit or loss-which is just the difference between sales and costs. So there are only three basic components in the statement: sales, costs, and profit (or loss). Other items on an operating statement are there only to provide supporting details.
16、,Business School of Nankai University,Text,There is no one time period an operating statement covers. Rather, statements are prepared to satisfy the needs of a particular business. This may be at the end of each day or at the end of each week. Usually, however, an operating statement summarizes resu
17、lts for one month, three months, six months, or a full year. Since the time period does vary, this information is included in the heading of the statement as follows:JOHNSON COMPANYOperating StatementFor the (Period) Ended (Date)Also, see Exhibit 5.1.,Business School of Nankai University,Text,Before
18、 going on to a more detailed discussion of the components of our operating statements, lets think about some of the uses for such a statement. Exhibit 5.1 shows that a lot of information is presented in a clear and concise manner. With this information, a manager can easily find the relation of net
19、sales to the cost of sales, the gross margin, expenses, and net profit. Opening and closing inventory figures are available-as is the amount spent during the period for the purchase of goods for resale. Total expenses are listed to make it easier to compare them with previous statements-and to help
20、control these expenses.,Business School of Nankai University,Text,All this information is important to a companys managers. Assume that a particular company prepares monthly operating statements. A series of these statements is a valuable tool for directing and controlling the business. By comparing
21、 results from one month to the next, managers can uncover unfavorable trends in the sales costs, or profit areas of the business-and take any needed action.Lets refer to Exhibit 5.1 and begin to analyze this seemingly detailed statement to get first-hand knowledge of the components of the operating
22、statement.,Business School of Nankai University,Text,As a first step, suppose we take all the items that have dollar amounts extended to the third, or right-hand, column. Using these items only, the operating statement ooks like this:,Business School of Nankai University,Text,Is this a complete oper
23、ating statement? The answer is yes. This skeleton statement differs from Exhibit 5.1 only in supporting derail. All the basic components are included. In fact, the only items we must list to have a complete operating statement are:,Business School of Nankai University,Text,These three items are the
24、essentials of an operating statement. All other subdivisions or details are just useful additions.Now lets define the meaning of the terms in the skeleton statement.The first item is sales. What do we mean by sales? The term gross sales is the total amount charged to all customers during some time p
25、eriod. However, there is always some customer dissatisfaction-or just plain errors in ordering and shipping goods. This results in returns and allowances-which reduce gross sales. A return occurs when a customer sends back purchased products. The company either refunds the purchase price or allows t
26、he customer dollar credit on other purchases,Business School of Nankai University,Text,An allowance occurs when a customer is not satisfied with a purchase for some reason. The company gives a price reduction on the original invoice (bill), but the customer keeps the goods and services. These refund
27、s and price reductions must be considered when the firm computes its net sales figure for the period. Really, were only interested in the revenue the company manages to keep. This is net sales-the actual sales dollars the company receives. Therefore, all reductions, refunds, cancellations, and so fo
28、rth made because of returns and allowances are deducted from the original total (gross sales) to get net sales. This is shown below:,Business School of Nankai University,Text,The next item in the operating statement-cost of sales-is the total value (at cost) of the sales during the period. Well disc
29、uss this computation later. Meanwhile, note that after we obtain the cost of sales figure, we subtract it from the net sales figure to get the gross margin.Gross margin (gross profit) is the money left to cover the expenses of selling the products and operating the business. Firms hope that a profit
30、 will be left after subtracting these expenses.Selling expense is commonly the major expense below the gross margin. Note that in Exhibit 5.1, expenses are all the remaining costs subtracted from the gross margin to get the net profit. The expenses in this case are the selling, administrative, and g
31、eneral expenses. (Note that the cost of purchases and cost of sales are not included in this total expense figure-they were subtracted from net sales earlier to get the gross margin. Note, also, that some accountants refer to cost of sales as cost of goods sold.),Business School of Nankai University
32、,Text,Net profit-at the bottom of the statement-is what the company earned from its operations during a particular period. It is the amount left after the cost of sales and the expenses are subtracted from net sales. Net sales and net profit are not the same. Many firms have large sales and no profits-they may even have losses! Thats why understanding costs-and controlling them-is important.,Business School of Nankai University,Thank you !,
