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    Income Statement

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    Elleighn Saez
    The document provides information about income statements, including that they show a company's revenues, expenses, and net income or loss over a period. Income statements can be presented in a single-step or multi-step format. The single-step format calculates net income directly, while the multi-step format separates operating and non-operating items into gross profit, operating income, and net income. Income statements are important for both internal users like management to analyze performance and make decisions, and external users like investors and creditors.

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    Income Statement

    Uploaded by

    Elleighn Saez
    69 views13 pages
    The document provides information about income statements, including that they show a company's revenues, expenses, and net income or loss over a period. Income statements can be presented in a single-step or multi-step format. The single-step format calculates net income directly, while the multi-step format separates operating and non-operating items into gross profit, operating income, and net income. Income statements are important for both internal users like management to analyze performance and make decisions, and external users like investors and creditors.

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    The document provides information about income statements, including that they show a company's revenues, expenses, and net income or loss over a period. Income statements can be presented in a single-step or multi-step format. The single-step format calculates net income directly, while the multi-step format separates operating and non-operating items into gross profit, operating income, and net income. Income statements are important for both internal users like management to analyze performance and make decisions, and external users like investors and creditors.

    Copyright:

    © All Rights Reserved
    Download as PPTX, PDF, TXT or read online from Scribd
    Download as pptx, pdf, or txt
    69 views13 pages

    Income Statement

    Uploaded by

    Elleighn Saez
    The document provides information about income statements, including that they show a company's revenues, expenses, and net income or loss over a period. Income statements can be presented in a single-step or multi-step format. The single-step format calculates net income directly, while the multi-step format separates operating and non-operating items into gross profit, operating income, and net income. Income statements are important for both internal users like management to analyze performance and make decisions, and external users like investors and creditors.

    Copyright:

    © All Rights Reserved
    Download as PPTX, PDF, TXT or read online from Scribd
    Download as pptx, pdf, or txt
    of 13

    INCOME

    STATEMENT
    Group 4

    11/21/2022
    Statement of Profit or Loss
    (INCOME STATEMENT)

    It shows the revenues or income and expenses of an entity for a


    period, and summarize the performace of the operation whether net
    income or net loss
    NET INCOME NET LOSS

    It is when the total income It is when total expense is


    is greater than the total greater than the total
    expense income

    Positive Result Negative Result


    INCOME
    REVENUES GAINS
    These are income arising from These are other income items that may
    ordinary operating activities of an or may not arise from ordinary
    entity operating activities of an entity.

    EXPENSE
    EXPENSES LOSSES

    The economic costs a business These are all expenses that go toward a loss-
    making sale of long-term assets, one-time or
    incur in order to earn revenue
    any other unusual costs, or expenses toward
    lawsuits
    COMPONENTS:
    Revenue/Sales Cost of Goods Sold(COGS)
    -The first section on the income statement, -Total costs of sales and services, also referred
    and it gives you a summary of gross sales to as the cost incurred to manufacture goods or
    made by the company services

    Gross Profit Expenses


    -Is defined as net sales minus the total cost -are the costs that the company has to pay
    of goods sold in your business. in order to generate revenue
    Net Income
    -The amount an individual or business makes after
    deducting costs, allowances and taxes
    Who uses
    Income Statement?
    Internal Users External Users
    -include company management and the -comprise investors, creditors, and competitors. Investors
    board of directors, who use this check whether the company is positioned to grow and be
    profitable in the future, Creditors use the income statement
    information to analyze the business’s
    to check whether the company has enough cash flow to pay
    standing and make decisions in order to off its loans or take out a new loan. Competitors use them to
    turn a profit. They can also act on any get details about the success parameters of a business and
    concerns regarding cash flow. get to know about areas where the business is spending a
    lot.
    2 WAYS IN
    PRESENTING INCOME
    STATEMENT
    SINGLE-STEP MULTI-STEP
    • Uses one equation to calculate • Separates operating items and non-
    Net Income operating items into a 3 step process
    • Offers more insight into the performance
    • Straightforward and simple of a business
    • Reports the line items gross profit and
    operating income
    • Takes more effort to prepare
    THE FORMULA IN FINDING
    SINGLE-STEP IS:

    NET INCOME=
    (Revenue+Gains)-(Expenses+Loses)
    SINGLE -STEP
    NET INCOME=
    (Revenue+Gains)-(Expenses+Loses)

    NET INCOME=
    (100,000+3,000+2,500)-
    (30,000+3,000+4,000++10,000+
    2,000+2,000+2,000+6,000)

    =(105,500)-(59,000)

    =46,500
    THE FORMULA IN FINDING
    MULTI-STEP IS:
    (Revenue-COGS)=Gross Profit
    (Gross Profit-Operating Expenses)=Operating Income
    (Operating Income-Non Operating Items)=Net Income
    MULTI -STEP
    (Revenue-COGS)=Gross Profit

    (Gross Profit-Operating Expenses)=Operating Income


    (Operating Income-Non Operating Items)=Net Income

    (100,000-30,000)=70,000

    (70,000-21,000)=49,000

    (49,000-2,500)=

    =46,500(net income)
    IMPORTANCE OF INCOME
    STATEMENT
    -This helps business owners decide whether they can
    generate profit by increasing revenues, by decreasing
    costs, or both. It also shows the effectiveness of the
    strategies that the business set at the beginning of a
    financial period
    Thank You
    Hopefully, this report can make your company
    even better

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