• Gross Income

    Income after manufacturing costs (invoicing sales minus the cost of goods sold).

  • Gross Margin

    Corresponds to the gross income as a percentage of invoiced sales.

  • Income

    The value that remains after costs and expenses have been subtracted from revenue; may be equivalent to “profit” if the subtractions include net financial items and tax costs, and if the value is positive (if the value is negative, then we speak of a “loss” with respect to income).

  • Income Statement

    The income statement describes revenues and costs for a certain period, such as for example a fiscal year. It answers the question: How is the company doing?

  • Indirect Cost

    A cost that cannot be directly assigned to a particular product or order, but which is instead accumulated for the department where it has arisen and then allocated according to a standard rule.

  • Intangible assets

    Assets that are not tangible, most common are Goodwill, Patents

  • Internal Rate of Return

    An expression for the percentage yield of an investment. Internal rate of return can for example be used in the comparison of the profitability of various investment projects and also in the calculation of how much a profitable investment may at most cost.

  • Inventory Turnover Rate

    A measure of how many times a company's average inventory has turned over during a year.

  • Investment

    An outlay for the acquisition of genuine assets. These assets will then be the object of depreciation over their economic lives.

  • Investment Calculation

    An estimate of all inflows and outflows of cash that arise in connection with the purchase of a particular fixed asset. The calculation can be carried out in several different ways, such as for example the pay-off method and the net present value (NPV) method.

  • Ledger

    A summary register of accounts receivable for each customer and accounts payable for each supplier.

  • Liabilities

    See short-term versus long-term liabilities.

  • Liquidity

    The readiness of the company to pay, that is, its ability to use its liquid assets in the short-run.

  • Long-Term Assets

    Receivables with a period of more than one year.

  • Long-Term Liabilities

    Liabilities that come due for payment after more than one year.

  • Loss

    At the end of a financial period, if the costs are greater than the revenues, then the company has generated a loss. (Compare with Profit).

  • Margin

    This is calculated as a form of profit expressed as a percentage of sales. The profit term (numerator) can be income after deductions for raw material costs or profit after deductions for full cost.

  • Marginal Cost

    (Boundary cost) the increase in total costs that arises when one additional product is sold.

  • Net Income

    Revenues minus costs.

  • Net Income After Financial Items

    The profit that indicates how well things are going for the company. This contains both the profit from operations and what it costs to finance them.