Income Statement (Factset)

Sales

FactSet's term for revenue: money earned from selling products or services, after returns and discounts. It is the top line. Example: A company sells 10,000 units at $100 each for $1,000,000 in sales. Formula: Sales = Gross sales − Returns − Allowances − Discounts

Sales Growth

The percentage change in sales from one year to the next. Example: Sales grow from $800,000 to $1,000,000, a 25% increase. Formula: (Current sales − Prior sales) ÷ Prior sales × 100

Cost of Goods Sold (COGS) incl. D&A

The direct costs of making or buying the products sold, including the depreciation and amortization FactSet places in COGS. Example: $380,000 of materials and labor + $20,000 of D&A = $400,000. Formula: COGS incl. D&A = COGS excluding D&A + D&A expense

COGS Excluding D&A

Direct production costs such as materials and labor, before depreciation and amortization. Example: $400,000 COGS incl. D&A − $20,000 D&A = $380,000. Formula: COGS excluding D&A = COGS incl. D&A − D&A expense

Depreciation & Amortization Expense

The total non-cash expense for spreading the cost of physical assets (depreciation) and intangible assets (amortization) over their useful lives; FactSet shows it inside COGS. Example: $15,000 depreciation + $5,000 amortization = $20,000. Formula: D&A = Depreciation + Amortization of intangibles

Depreciation

Spreading the cost of physical long-term assets like buildings and machinery over their useful lives; a non-cash expense. Example: A $150,000 machine with a 10-year life and no salvage value is depreciated $15,000 per year. Formula: Straight-line depreciation = (Cost − Salvage value) ÷ Useful life

Amortization of Intangibles

Spreading the cost of intangible assets like patents or customer lists over their useful lives; a non-cash expense. Example: A $50,000 patent with a 10-year life is amortized $5,000 per year. Formula: Amortization = Cost of intangible asset ÷ Useful life

Gross Income

FactSet's term for gross profit: sales minus cost of goods sold; shows how profitable the products themselves are. Example: $1,000,000 − $400,000 = $600,000. Formula: Gross income = Sales − COGS incl. D&A

Gross Margin

Gross income as a percentage of sales. Example: $600,000 ÷ $1,000,000 = 60%. Formula: Gross margin = Gross income ÷ Sales × 100

SG&A Expense

Selling, general, and administrative expenses: operating costs not directly tied to making products, such as salaries, marketing, rent, and office costs. Example: $300,000 of SG&A on $1,000,000 of sales is 30% of sales. Formula: SG&A as % of sales = SG&A expense ÷ Sales × 100

Other SG&A

FactSet's line for SG&A not broken out separately, such as research and development. Example: Total SG&A is $300,000 and $50,000 of it is R&D, so other SG&A is $250,000. Formula: Other SG&A = SG&A expense − Separately reported items

EBIT (Operating Income)

Earnings before interest and taxes: profit from core operations after COGS and SG&A. Example: $600,000 − $300,000 = $300,000. Formula: EBIT = Gross income − SG&A expense

Operating Margin

EBIT as a percentage of sales; shows how much of each sales dollar the core business turns into profit. Example: $300,000 ÷ $1,000,000 = 30%. Formula: Operating margin = EBIT ÷ Sales × 100

Nonoperating Income - Net

Income and expenses that don't come from the main business, such as interest earned and miscellaneous gains or losses. Example: $12,000 interest income + (−$2,000) other expense = $10,000. Formula: Nonoperating income − net = Nonoperating interest income + Other income (expense)

Nonoperating Interest Income

Interest earned on cash and investments. Example: $200,000 in savings earning 6% produces $12,000. Formula: Interest income = Cash and investments × Interest rate earned

Other Income (Expense)

Miscellaneous nonoperating gains and losses, such as currency gains or losses; a negative number is a net expense. Example: A $2,000 loss from exchanging foreign currency shows as −$2,000. Formula: Part of nonoperating income − net

Interest Expense

The cost of borrowing money on loans, bonds, and leases. Example: A $200,000 loan at 10% costs $20,000 per year. Formula: Interest expense = Debt balance × Interest rate

Gross Interest Expense

Total interest owed before subtracting interest capitalized into assets being built. Example: $22,000 of total interest − $2,000 capitalized into a new building = $20,000 interest expense. Formula: Interest expense = Gross interest expense − Capitalized interest

Interest Coverage Ratio

How many times operating profit covers interest costs; higher means less risk from debt. Example: $300,000 ÷ $20,000 = 15 times. Formula: Interest coverage = EBIT ÷ Interest expense

Unusual Expense - Net

One-time or non-recurring charges and gains that FactSet separates out, such as impairments, restructuring, and valuation gains or losses. Example: $30,000 impairments + $8,000 restructuring + $5,000 exceptional charges − $3,000 unrealized gain = $40,000. Formula: Unusual expense − net = Impairments + Restructuring + Exceptional charges − Unrealized valuation gains (or + losses)

Impairments

Write-downs when an asset's value falls below its balance sheet value; a non-cash charge. Example: $20,000 goodwill + $7,000 other intangibles + $3,000 PP&E = $30,000. Formula: Impairment loss = Carrying value − Recoverable (fair) value

Goodwill Impairment

A write-down of goodwill when an acquired business is worth less than what was paid for it. Example: A business unit carried at $120,000 is now worth $100,000, so $20,000 of goodwill is written off. Formula: Goodwill impairment = Carrying value of business unit − Fair value of business unit (up to the goodwill balance)

Other Intangibles Impairment

A write-down of intangible assets other than goodwill, such as trademarks or customer relationships. Example: A trademark recorded at $27,000 is now worth $20,000, a $7,000 impairment. Formula: Impairment = Carrying value − Fair value

Property, Plant & Equipment Impairment

A write-down of physical assets like buildings or equipment whose value dropped. Example: A damaged machine recorded at $10,000 is now worth $7,000, a $3,000 impairment. Formula: Impairment = Carrying value − Recoverable value

Restructuring Expense

One-time costs of reorganizing the business, such as severance, layoffs, and closing facilities. Example: A company closes a warehouse and pays $8,000 in severance and moving costs. Formula: Part of unusual expense − net

Unrealized Valuation Gain/Loss

Changes in the value of assets or contracts still held, recorded in income before they are sold; in FactSet's unusual section a positive number is a gain and a negative number is a loss. Example: A currency contract bought for $10,000 is now worth $13,000, a $3,000 unrealized gain. Formula: Unrealized gain (loss) = Current fair value − Previously recorded value

Hedges/Derivatives

Gains or losses on financial contracts used to manage risks like currency or commodity price changes. Example: The $3,000 gain on the currency contract above is a hedge/derivative gain. Formula: Gain (loss) = Change in fair value of the contract

Excpl Chrgs - Others (Exceptional Charges - Others)

Other one-time charges that don't fit FactSet's other unusual categories. Example: A $5,000 one-time charge to exit a contract. Formula: Part of unusual expense − net

Early Termination of Contracts

Costs paid to exit agreements such as leases or supply deals before they end. Example: A company pays $5,000 to break an office lease two years early. Formula: Part of exceptional charges − others

Pretax Income

Profit after operating, nonoperating, interest, and unusual items, but before income taxes. Example: $300,000 + $10,000 − $20,000 − $40,000 = $250,000. Formula: Pretax income = EBIT + Nonoperating income − net − Interest expense − Unusual expense − net

Income Taxes

Total income tax expense, including taxes owed now (current) and taxes shifted to future years (deferred). Example: $35,000 + $12,000 + $2,000 + $1,000 = $50,000. Formula: Income taxes = Current domestic + Current foreign + Deferred domestic + Deferred foreign

Income Taxes - Current Domestic

Income tax owed to the home country for the current year. Example: A U.S. company owes $35,000 to the IRS for this year. Formula: Taxable domestic income × Domestic tax rate

Income Taxes - Current Foreign

Income tax owed to other countries for the current year. Example: The company owes $12,000 in taxes on profits earned in Canada. Formula: Taxable foreign income × Foreign tax rates

Income Taxes - Deferred Domestic

Domestic tax expense, or benefit if negative, from timing differences between accounting and tax rules that settle in future years. Example: Faster depreciation for tax purposes creates $2,000 of domestic taxes owed later. Formula: Change in domestic deferred tax liabilities − Change in domestic deferred tax assets

Income Taxes - Deferred Foreign

Foreign tax expense, or benefit if negative, from timing differences that settle in future years. Example: $1,000 of foreign taxes will be owed in a future year. Formula: Change in foreign deferred tax liabilities − Change in foreign deferred tax assets

Effective Tax Rate

The share of pretax income paid as income tax. Example: $50,000 ÷ $250,000 = 20%. Formula: Effective tax rate = Income taxes ÷ Pretax income × 100

Consolidated Net Income

Total profit of the company and all subsidiaries it controls, before removing the share owned by minority (noncontrolling) investors. Example: $250,000 − $50,000 = $200,000. Formula: Consolidated net income = Pretax income − Income taxes

Net Income

The bottom line: profit belonging to the company's own shareholders after removing minority interest. Example: $200,000 consolidated net income − $0 minority interest = $200,000. If outside owners held part of a subsidiary and their share were $10,000, net income would be $190,000. Formula: Net income = Consolidated net income − Minority interest

Net Income Available to Common

Net income left for common shareholders after preferred dividends; used to calculate EPS. Example: $200,000 net income − $0 preferred dividends = $200,000. Formula: Net income available to common = Net income − Preferred dividends

Net Profit Margin

Net income as a percentage of sales. Example: $200,000 ÷ $1,000,000 = 20%. Formula: Net margin = Net income ÷ Sales × 100

Net Income Growth

The percentage change in net income from one year to the next. Example: Net income grows from $160,000 to $200,000, a 25% increase. Formula: (Current net income − Prior net income) ÷ Prior net income × 100

Common-Size Analysis

Showing every income statement line as a percentage of sales to compare years or companies of different sizes. Example: COGS of $400,000 on $1,000,000 of sales is 40% of sales. Formula: Line item ÷ Sales × 100

EPS (Basic)

Earnings per share: net income available to common divided by the weighted average number of common shares. Example: $200,000 ÷ 100,000 shares = $2.00. Formula: Basic EPS = Net income available to common ÷ Basic shares outstanding

Basic Shares Outstanding

The weighted average number of common shares outstanding during the year, used for basic EPS. Example: A company has 90,000 shares for half the year and 110,000 for the other half, an average of 100,000. Formula: Sum of (Shares outstanding × Fraction of year outstanding)

Total Shares Outstanding

The actual number of common shares outstanding at the end of the period, not an average. Example: 100,000 shares issued − 2,000 bought back = 98,000 shares at year end. Formula: Total shares outstanding = Shares issued − Treasury shares

EPS (Diluted)

EPS calculated as if all stock options and convertible securities became common shares; always equal to or lower than basic EPS. Example: $200,000 ÷ 105,000 diluted shares = $1.90. Formula: Diluted EPS = Net income available to common ÷ Diluted shares outstanding

Diluted Shares Outstanding

Basic weighted average shares plus the extra shares that would exist if options and convertibles were exercised. Example: 100,000 basic shares + 5,000 shares from employee stock options = 105,000. Formula: Diluted shares = Basic shares + Dilutive securities

EPS (Recurring)

EPS that excludes unusual, one-time items to show earnings from ongoing business. Example: Adding back the $40,000 unusual expense after 20% tax ($32,000): ($200,000 + $32,000) ÷ 100,000 = $2.32. Formula: Recurring EPS = (Net income + After-tax unusual expenses − After-tax unusual gains) ÷ Shares outstanding

Earnings Persistence

A FactSet-reported measure of how consistent and repeatable a company's earnings are over time; higher generally means more stable earnings. Example: A company whose profits are steady every year scores higher than one whose profits jump around because of one-time gains. Formula: Calculated by FactSet; check FactSet's definition for its exact method

EBITDA

Earnings before interest, taxes, depreciation, and amortization; a rough measure of operating cash profit. Example: $300,000 EBIT + $20,000 D&A = $320,000. Formula: EBITDA = EBIT + Depreciation & amortization

EBITDA Margin

EBITDA as a percentage of sales. Example: $320,000 ÷ $1,000,000 = 32%. Formula: EBITDA margin = EBITDA ÷ Sales × 100