Net Sales

Total company sales minus sales returns, refunds, or allowances.

Also called Net Revenue, and listed on the Income Statement, the Net Sales is the income generated by the company selling its products and/or services with any sales returns, refunds, or allowances subtracted.

Sales are typically a key income source for any company, and a upward trend is generally, but not always, a good sign. For example, if Net Sales of a company doubled from the year before, but the company's expenses tripled, then this may actually be a bad sign. That is why Net Sales is used in many of the profitability performance ratios, like Gross Profit Margin, Operating Profit Margin, and Net Profit Margin.

Tags: Financial Statement Term, Income Statement