The financial accounting term net sales is used to describe revenues after accounting for returns, discounts, and allowances for factors like damaged or missing goods. The net sales line item appears on a company's income statement.
Net Sales = Revenues (Gross Sales) - Sales Returns and Allowances
Net sales is a restatement of sales (or revenues), and more accurately reflects the stream of money that flows into the company. The adjustment is necessary to account for consumer returns of merchandise.
This metric is frequently used by management to measure customer satisfaction with a product. This is done by examining and tracking the percentage of sales returns:
Sales Returns (%) = (Sales Returns and Allowances / Gross Sales) x 100
If the value of sales returns appears high relative to benchmarks, the company can conduct research to determine the source of the product dissatisfaction.
The table below demonstrates how net sales would appear in a company's income statement:
| Gross Sales | 29,936,000 |
| Less: Sales Returns and Allowances | (325,000) |
| Net Sales | 29,611,000 |
| Cost of Goods Sold | 15,693,000 |
| Gross Profit | 13,918,000 |
income statement, revenues, cost of goods sold, sales returns and allowances
Explore Investing Further
Trading has never been easier, thanks to the rise of online platforms that enable you to buy and sell various assets at the click of a button. But with so many options available, it can be challenging to decide which platform is right for you.
Looking for a way to avoid swap fees while trading forex?
Below listed are the small reviews of the top 10 ETF brokers available across the United States.
Our top beginner's pick for copy trading is eToro. Read on for more details, plus seven good alternatives.
Swing trading stocks can be a great way for investors to take advantage of short-term stock market movements and gain significant returns. If you're interested in swing trading, the key to success lies in selecting the right stocks to buy and sell quickly for a profit.
The table below lists the best stock picks under $2, listed on public exchanges.
The table below lists the best stock picks under $1, listed both on public and OTC exchanges.
This section will highlight the best EV-trading penny stocks available in the United States.
The demand for sustainable energy has grown rapidly in recent years. This has resulted in increased scrutiny of the automotive market. As a result, the electric vehicle (EV) industry has made significant advancements.
Intelligent Bio Solutions Inc. is a life sciences company, founded in 2016 with headquarters in New York and is engaged in performing diagnostic tests, real-time monitoring, and non-invasive surgery for its patients. The firm has developed a CoV-2 Biosensor, which can be used in RNA virus detection.
Hour Loop was founded in 2013 with headquarters in Redmond, Washington. It’s an online retailer involved in e-commerce in the United States that hit the public markets on Jan 7th of 2022. The company sells home/garden decor, electronic products, kitchenware, and apparel through walmart.com, amazon.com, and hourloop.com.
.jpg)
