Template Of An Income Statement

This is a simple equation that shows the profitability of a company.

Template of an income statement. If revenue is lower than expenses the company is unprofitable. Using this information management can easily spot dips and surges in revenue expenses and overall profit over the course of time. The first is a simple single step income statement with all revenues and expenses lumped together. An income statement also known as a profit and loss statement shows revenue and expense over a period of one year.

The income statement is used to calculate the net income of a business. An income statement reports a company s income expenses and thus derives its profit generated for a specific period generally for a financial year. Use this accessible template to create an income statement. If revenue is higher than expenses the company is profitable.

The p l formula is revenues expenses net income. This net profit is important for all company s reporting purposes and this profit is used for further allocation of next year s provisions and reserves. The attached excel template of an income statement is to be used for understanding how to calculate net profit from gross sales reported by a company. For example a comparative income statement might include the months of january february and march with separate column headings and a full income statement prepared for each month.

Along with the balance sheet and the cash flow statement the income statement is one of the three basic financial statements. Businesses selling physical goods can use the income statement to track changes in returns cost of goods or operating expenses as a percentage of sales to quickly fix issues in the business.