What is the easiest and most accurate way to determine how much money a business (individual or company) makes in revenue and profit?
In: Economics
Not an easy task. In the US withh publicly traded companies that information is reported in the shareholders report.
If a company is involved in direct to consumer sales and subject to sales tax that information is available.
For companies outside the US or that are wholesale companies, or it can be very difficult.
Do you have a specific company in mind?
Publicly traded corporations (at least in the US) have to file reports that should give most people a decent sense of revenue and profit. Revenue tends to be fairly straightforward (did money come in?), although there can be timing issues that are impactful (e.g., recognition of revenue received in December for services to be delivered in January). But large companies will generally be consistent from year to year on things like this, so over time it evens out. Profit is much trickier, and looking at EBTIDA is generally a better indicator of year to year profitability (that’s Earnings Before Taxes, Interest, Depreciation and Amortization, all of which can be volatile and only loosely related to what is happening in the company currently). It’s important to understand how cash flow and the balance sheet interacts with the profit and loss statement (where revenue and profit appears) – e.g., a company with big profits but running low on cash is very different from a company with big profits and lots of cash.
For smaller companies that are not publicly traded, it is usually much harder to get a good picture of their financials. They showcase what they want known and stay mum on the rest. There are companies that compile credit and other information about non-publicly traded companies, and they sell profiles and research about those companies.
Companies registered in the UK have to file accounts with Companies House. These are available online for free and include figures for turnover and profit.
However smaller businesses (under £1m turnover, iirc) are exempt from providing accounts, and larger ones (or even medium-sized ones) may have complicated financial arrangements that make these figures hard to make sense of.
Yahoo finance is where I go to find info on publicly traded corporations. Private businesses are private and have no obligation to make their business details available to you, most of the time private corps keep that pretty close to the chest.
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