An income statement is a key financial document in business. It shows the profitability of a company over a specific period of time. It is used to track income and expenses. The following guide shows you how to prepare a simple multi-step income statement. A multi-step income statement separates operating income and expenses from non-operating items.
Income Statement Template
Writing an Income Statement
1List the Sales figure. The is also known as gross revenue.Ad
2Deduct Cost of Goods Sold. This includes all costs to make/buy the goods.
3Calculate Gross Profit. This is Sales less Cost of Goods Sold.
4Deduct Operating Expenses. These are often divided into Sales related and Office/Administration related. These include items like salaries, advertising, rent, utilities, and depreciation.
5Calculate Operating Income. This is Gross Revenue less Cost of Goods Sold.
6Add Other Revenue such as interest revenue, and gain on sale.
7Deduct Other Expenses such as interest expenses, and loss on sale.
8Calculate Net Income. This Operating Income plus Other Revenue less Other Expenses.Ad
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- An income statement covers a specific period of time. All items listed should relate to that period of time. The time frame should be listed at the top of the income statement.
- An income statement shows income and expenses. It does not show money received or paid. This is done using a cash flow statement.
Categories: Accounting and Regulations
In other languages:
Español: escribir una declaración de ingresos, Italiano: Fare un Calcolo del Reddito, Português: Fazer uma Demonstração de Resultados, Русский: написать отчет о прибылях и убытках, Deutsch: Eine Gewinn und Verlustrechnung machen, Français: établir un compte de résultat
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