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ARF FORM 1 ATTACHMENT ERROR JANUARY 2014 REVENUE REQUIREMENT CALCULATION OPERATING RATIO METHOD (Method commonly used by investor owned utilities and/or nonprofit entities that do not have long term
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How to Fill Out Revenue Requirement Calculation:

01
Start by gathering all relevant financial information, including revenue figures, expenses, and any other factors that may impact the calculation.
02
Determine the timeframe for the revenue requirement calculation. This could be monthly, quarterly, or annually, depending on the needs of your organization.
03
Break down your revenue sources into categories, such as sales revenue, service revenue, or other sources.
04
Calculate the total revenue by adding up the figures from each category.
05
Identify and quantify any deductions or adjustments that need to be made to the revenue. This could include discounts, returns, or allowances.
06
Subtract the deductions or adjustments from the total revenue to obtain the net revenue.
07
Next, determine the specific expenses that are directly related to generating revenue. This could include costs of goods sold, marketing expenses, or sales commissions.
08
Calculate the total expenses and subtract them from the net revenue to obtain the gross profit.
09
Consider any indirect expenses or overhead costs that need to be factored into the revenue requirement calculation. This could include rent, utilities, or administrative expenses.
10
Add the indirect expenses to the gross profit to obtain the net profit.
11
Finally, consider any additional factors that may impact the revenue requirement calculation, such as taxes or interest expenses. Adjust the net profit accordingly to calculate the final revenue requirement.

Who Needs Revenue Requirement Calculation?

01
Businesses and organizations of all sizes may require revenue requirement calculations to gain insights into their financial performance and make informed decisions.
02
Non-profit organizations, government agencies, and educational institutions may need revenue requirement calculations to assess their funding needs and budget allocations.
03
Investors and stakeholders may use revenue requirement calculations to evaluate the financial health and profitability of a company before making investment decisions.
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Revenue requirement calculation is the process of determining the amount of revenue needed to cover the costs of providing a service or producing a product.
Utility companies and service providers are required to file revenue requirement calculations.
Revenue requirement calculations are typically filled out using financial data, cost projections, and other relevant information.
The purpose of revenue requirement calculation is to ensure that prices are set at a level that allows companies to cover their costs and earn a reasonable return on investment.
Information such as operating expenses, capital costs, depreciation, taxes, and other financial data must be reported on revenue requirement calculations.
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2014 NOI rr forma Allowable Applicable footnote warranted entities CALCULATION exceeds utilities ARF Provision determining deduct ATTACHMENT commonly investor conversion REQUIREMENT requirements

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