In accounting terms, this refers to all revenues received by a company, both as a result of its sales and other sources such as interest, dividends or rent. This figure is often called “turnover” or “revenue” and it must be stated on the Income Statement in terms of the Companies Act. In the profit calculation, the company’s variable expenses are deducting from its income to arrive at its gross profit – and then its fixed costs are deducted to arrive at its net profit. When looking at a company’s income statement, one very simply check you can make is to see whether the income from this accounting period is more by at least the inflation rate than the income of the previous comparable period. Because if it is not then the company is going backwards.

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