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Revenues

• Also known as Sales. The amount collected for all goods or services sold during the period. Sales are crucial to the success of the company because sales provide the income for operations (although the company may also borrow money). There must be enough sales to support company activities and debt repayment.

 
 Embedded terms in definition
 Borrow
Debt
Income
Sales
Support
 
 Referenced Terms
 Budget deficit: The amount by which government spending exceeds government Revenues.

 Cash basis: Recognizes Revenues and expenses only with respect to actual inflows and outflows of cash. The cash basis is the main focus of the finance discipline.

 Credit scoring models: These are quantitative models that predict bankruptcy. They establish which factors are important with regard to credit risk. They evaluate the relative importance of these risk factors, improve the estimation of default probability, automate the rejection of bad loan applicants, and improve the pricing of the loan. They also help calculate any potential future loan losses and possible Revenues.

 Depreciation: Is the charge against Revenues which represents a prorated capitalization of the cost of an asset. For example, if a computer is expected to have a useful life of 5 years and cost $6,000 with no salvage value, then the annual, straight-line depreciation would be $1,200 per year. If the same computer had an estimated salvage or residual value of $500, then the annual depreciation would be $1,100 ($6,000 -500 = $5,500 divided by 5 years).A non-cash expense that provides a source of free cash flow. Amount allocated during the period to amortize the cost of acquiring Long term assets over the useful life of the assets.(1) An expense recorded regularly on a company's books to reduce the value of a long-term tangible asset. Since it is a non-cash expense, it increases Free Cash Flow while decreasing the amount of a company's reported earnings. (2) A decrease in the value of a particular currency relative to other currencies.The systematic charging of a portion of the costs of fixed assets against annual Revenues over time.

 Depreciation: Is the charge against Revenues which represents a prorated capitalization of the cost of an asset. For example, if a computer is expected to have a useful life of 5 years and cost $6,000 with no salvage value, then the annual, straight-line depreciation would be $1,200 per year. If the same computer had an estimated salvage or residual value of $500, then the annual depreciation would be $1,100 ($6,000 -500 = $5,500 divided by 5 years).A non-cash expense that provides a source of free cash flow. Amount allocated during the period to amortize the cost of acquiring Long term assets over the useful life of the assets.(1) An expense recorded regularly on a company's books to reduce the value of a long-term tangible asset. Since it is a non-cash expense, it increases Free Cash Flow while decreasing the amount of a company's reported earnings. (2) A decrease in the value of a particular currency relative to other currencies.The systematic charging of a portion of the costs of fixed assets against annual Revenues over time.

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