Income statement template is a financial statement which tells about the company’s financial achievement for a certain period. Financial achievement or performance is a personal measure of a company, how well an organization can use resources from its primary mode of business to generate revenues. This is also a general measure to know the firm’s overall financial health (the state of one’s personal financial situation) over a given period of time.
Income Statement Template Excel
Accounting period is an establish for a time in which financial transaction and accounting functions are executed, accumulated and examined for a period of one calendar year. This period is useful in investing because investors examine the company’s performance through its financial statements that are base on a fix accounting period. Revenue is the amount of money that a company obtains during a financial period, including all kinds of discounts and deductions for payback product. Revenue is the top line gross income number from which costs are deducted to evaluate net income.
Revenue – Cost = Net Income
It is compute by multiplying the price at which goods or services are sold by the number of units or amount sold. It is also identify as sales on the income statement. Income Statement is also called the Profit or loss statement.
Factors of Income Statement Template
Following are the factor of the income statement;
It is the money that a unit receives from the sale of goods or services for a particular period.
Cost of Goods Sold (COGS)
Cost of goods sold are the direct costs to the production of the goods sold in a company. This cost will include all the resources that require for the production of goods.
Gross profit is the difference between the revenue and Cost of Goods Sold.
Gross profit=Revenue-Cost of Goods Sold
Operating expenses are the amount that a unit consume to control and run the business. Research and development, marketing, general and administrative, amortization of intangible assets (i.e. patents, goodwill, etc.), etc. all included in the Operating Expenses.
Depreciation expense is an expense that is subtract from net income.
It is equal to revenues minus cost of goods sold and operating expenses. Operating Income is also called Earnings Before Interest and Taxes (EBIT).
Operating income = gross income – operating expenses – depreciation – amortization.
For calculating the net income, further arrangements must be made to account for interest income and expense, income tax expenses, and other unusual and mix items.
Revenues minus all expenses equal to net income. Profits are also assign to as net income or the “bottom line” because profits are calculate at the bottom of the income statement.
Pattern Income Statement Template
The following steps are perform to generate total net income or profit;
– Cost of Goods Sold Expense
= Gross Profit (or Loss)
– Operating Expenses
= Operating Income
+ investment income
– Interest Expense
+/- Non-Recurring Events (Extraordinary items)
= Profit or Net Income