# Net Income Percentage Definition

## Definition

The term online revenue percent refers to your standard term which assesses the internet gain generated by all financing and operating tasks. Online revenue percent is used as a performance standard.

### Calculation

Net Income Percentage = (Net Income / Sales) X-100

Where:

• Sales incorporate the overall earnings from the recent accounting period.
• Net income is equal to earnings revenues minus expenses, including depreciation, interest, and taxes.

### Explanation

Operating performance measures permit the investor-analyst to comprehend how well an organization is performing depending on earnings, gross profits, and profits. One of those techniques to assess the potency of an organizations core business is by simply calculating their net revenue percent.

This metric can be considered a standard step and can be utilized to compare the operation of varied bookkeeping phases. The calculation only takes the organizations online gain and divides it from earnings, then multiplying by 100 to express the exact value for a proportion. When coming up with period to period comparisons, then it’s desired to get rid of outstanding (non-recurring) earnings and expenses.

### Example

Company ABC produces the CEO would love to get started tracking the organizations net revenue percent. The business ‘s income statement within the present stage appears below.

 Total Revenue 29,611,000 Cost of Revenue 15,693,000 Gross Profit 13,918,000 Operating Expenses Research Development 1,570,000 Selling General and Administrative 6,170,000 Total Operating Expenses 7,740,000 Income from Continuing Operations Total Other Income/Expenses Net 39,000 Earnings Before Interest And Taxes 6,217,000 Interest Expense 186,000 Income Before Tax 6,031,000 Income Tax Expense 1,674,000 Minority Interest -74,000 Net Income 4,283,000

A fiscal analyst utilized the aforementioned formula to Ascertain the Business ‘s online earnings as:

= (4,283,000 / / 29,611,000) X100, or 14.5percent

Going forward, this value will probably be contrasted to company’s operation in succeeding accounting periods.