How to Calculate Nets Sales From a Balance Sheet
The net sales of a company is the total amount of sales made minus the costs associated with these sales. Net sales are not calculated on the balance sheet but rather on the income statement. The figure is, however, recorded on the balance sheet in one form or the other. If you already have the required information on your annual income statement, calculating net sales is a relatively simple process.
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Instructions
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Obtain your company's income statement, which will contain the information necessary for your calculation. An income statement is broken down into two general sections. The first is revenues and gains, and the second is expenses and losses. Revenues and gains are further broken down into revenues from primary activities, revenues from secondary activities and gains. Similarly, expenses are broken down into expenses involved in primary activities, expenses from secondary activities and losses.
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Gather the required information from the income statement. Specifically, you will need the gains from primary activities and the expenses from primary activities. Revenues from primary activities are the gross sales, that is the revenue your company makes from selling goods and services. Expenses from primary activities involves the cost of buying these goods and services from a wholesaler, if applicable, returned merchandise or broken merchandise.
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Subtract the expenses from primary activities from the revenue from primary activities. This will give you the net sales. This figure is in turn recorded on your company's balance sheet. The figure on the balance sheet is broken into two. Merchandise already paid for is recorded as cash, and merchandise paid with credit is recorded under accounts receivable.
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