Definition of Net sales:
Gross sales revenue less returns and discounts; the amount shown in an income statement under sales revenue.
Net sales is the sum of a company's gross sales minus its returns, allowances, and discounts. Net sales calculations are not always transparent externally. They can often be factored into the reporting of top line revenues reported on the income statement. .
The income statement is the financial report that is primarily used when analyzing a company’s revenues, revenue growth, and operational expenses. The income statement is broken out into three parts which support analysis of direct costs, indirect costs, and capital costs. The direct costs portion of the income statement is where net sales can be found.
How to use Net sales in a sentence?
- To find out how much money your business is really making you need to know the net sales to find your bottom line profit.
- To see where our company was at, we had to see how our net sales were doing because that was a big part of our income.
- Net sales is the result of gross sales minus returns, allowances, and discounts.
- If net sales are externally reported they will be notated in the direct costs portion of the income statement.
- Knowing what your net sales are will help you tally just how much profit you really make per item sold.
- Changes in net sales will effect a company’s gross profit and gross profit margin but net sales do not include costs of goods sold.
Meaning of Net sales & Net sales Definition