Revenue Flow Chart (Sankey)
A revenue flow chart uses bands of varying width to break down a quarter's revenue from left to right: on the left, revenue from each business segment; on the right, cost of revenue, R&D, SG&A, taxes and, finally, net income.
How to read it
The width of each band is the dollar amount, so you can see at a glance which business contributes the most, where the money mostly goes and how much is left at the end.
Comparing the charts for different quarters of the same company makes changes in the business mix and the cost structure easy to see.
Common pitfalls
- Segment revenue and cost line items come from company disclosures, and every company defines them differently. Some companies (utilities, certain financials) do not break out costs in their earnings releases, and in those cases no chart is drawn.
On FinDog
The revenue flow chart is the third section of every earnings analysis. The numbers come from the original filing and XBRL data, and the chart is shown only after the totals on both sides have been reconciled with total revenue.
Read the latest analyses →Related terms
- Gross MarginGross margin is (revenue minus cost of revenue) divided by revenue: how much of each dollar of sales is left after direct costs. It reflects the profitability of the product itself and the company's pricing power.
- Operating MarginOperating margin is operating income divided by revenue. Operating income is what remains of gross profit after operating expenses such as R&D, sales and marketing, and general and administrative costs, so it reflects the overall profitability of the core business.