ed to understand the basic concepts embodied in financial statements and the interaction between revenue, gross margin, product and service cost, capital investment, and depreciation. The long-term growth and prosperity of the business rests on three factors: revenue and gross margin from current products and/or services, design and development of new or replacement products and services, and capital investment. Organizational sustenance re- quires that revenues meet, and preferably exceed, all cost of doing business. After all costs are covered, any debt must be serviced in the form of interest and payment of principle. What's left is called income before taxes. However, only interest paid can be deducted before subjecting the income to taxes. Non-profit and governmental enterprises operate with the same basic requirement except they are not by law allowed to make a profit. Non-profit organizations operate under a specific section of the tax law in most countries. They obtain an exemption certificate initially and must file regular reports of income and cost to retain the certifi- cate. Governmental organizations-federal, state, municipal, and local government bodies as well as organizations they sponsor-are not generally required to obtain tax exemption certificates; however, they generally have reporting and financial accounting requirements imposed on them by the parent or body that created them in the first place. Regardless of their tax or commercial status, these organiza- tions are required to keep accounting records that keep track of the money they receive and pay out. Maybe there's a vague distinction between profit and non-profit by choice and use of the terms income statement and profit and loss (P&L). Both have the famous bottom line, and the bottom line is the fact that survival is dependent on sufficient money coming in to match, or in the case of the profit 13 TECHNOLOGY FORECASTING AND STRATEGIC PLANNING oriented business, a margin to pay dividends and grow the business strategically. PRODUCT-SE