Examples Of Income Statement

(Ohara, 2007) Most financial statements are made public for the benefit of stakeholders and potential investors. The bottom-line is that financial statements are the main source for analyzing how well a company is operating. The income (or profit and loss) statement is simply a report card of how much activity (revenue) was performed in the period, how profitable that activity was (gross profit/loss), and what it cost the contractor to run the business (overhead). (Murphy, 2006)

To consider this I will be looking at the Income Statement. If the company’s revenue exceeds its expenses it will report net income or will report a net loss. This will report on the success or failure of the company’s operation by reporting its revenue and expenses.

A profit and loss account is intended to show a business its income and expenditures and calculate the company’s net profit or loss based upon the difference between those figures. It is extremely useful in determining past performance and to try and predict future results. It enables a business to see what changes could make to improve on its profit. It also give enough information to help a business to set targets.

There is an general increase of sales when the income statement is provided. “The income statement reports the revenues and expenses for a specific time period.” (Weygandt, J. Kieso, D. Kimmel, P. 2008) The format of an income statement is listed with revenues first then expenses. Net loss is when the expenses exceed the revenue and net income is

I think that Net profit is more important than Gross profit because although the business could have £740,000 (2012) in Gross Profit, the business may have very high expenses therefore the net profit figures offer a more realistic figure of the finances available. The Net profit shows the actual profit once all expenses are deducted from the Gross profit. The expenses could be higher than the Gross profits which once deducted would leave the business at a loss when they thought they were making a profit from the Gross Profit. In 2012 the expenses were £733,000. Once this was taken off the Gross Profit it left a Net profit of £7,000. If the expenses were even higher than the Net profit figure this would have been a negative balance causing problems for the business.

An income statement, also known as a profit and loss statement shows how much money a company has spent over a period of time. It also shows the costs and expenses that are associated with earning that revenue. It is an important measure of the company’s profitability. The simple building blocks of a net income formula are revenues minus expenses equal net income.

Typically, net profit is measured on a quarterly or annual basis. When compared with a company net profit during other periods, it can provide a useful measure for how profitable a company is over time and the overall performance of the company & management team.

Accounting profit is the profit that would appear on your accounting statement that you would report to the government for tax purposes.

Profit is the money that a business earns in revenue, minus investments, and the cost of salaries.

The income statement (IS) also known as the profit & loss statement provides the net gain or net loss of a business entity. The importance of the income statement is to evaluate profitability of a company (Finkler, Jones, and Koyner, 2013). The best use of the IS,

Profit is a surplus in money after taking into account all costs incurred in buying and selling a product. Operating profit is the profit made after all direct and indirect costs have been paid. (Bized, 2010a) From NEXT’s company accounts, the operating profit has increased by £51.5m. This is a positive steady increase which has been achieved throughout the

The first of the financial statements is the income statement. The income statement states the revenues and expenses in an understandable way that shows a clear picture of net income or net loss for the

This essay will begin to look at the main financial statements used by decision makers in businesses today. This essay will go into detail about the income statement and statement of financial position and whether these two statements provide decision makers with their financial information adequately. This essay will also include the various advantages and disadvantages of each financial statement as well as describing whom the decision makers are and why financial statements are important to them. A conclusion will be present at the end of this essay to demonstrate an overall view of whether financial statements are beneficial to decision makers.

2. Calculate the company 's cost of goods sold. Cost of goods sold represents the cost of raw materials and production of the finished good. Cost of goods sold is the largest cost component the income statement of many companies. The formula for cost of goods sold is beginning merchandise inventory plus purchases of merchandise

The Purpose of Financial Statements The financial statements of a business are used to provide information about the status of the business, set performance targets and impose restrictions on the managers of the firm as well as provide an easier method for financial planning. The financial statements consist of the Profit and Loss Account, Balance Sheet and the Cash Flow Statement. There are four areas of information, which we can collect from a company's financial statements. They are: Ÿ