An income statement or benefit and deficit statement is a basic fiscal report where the key value reported is known as Net Income. The statement organizes an organization’s incomes and operational expense to give a comprehensive view of the money related performance of an organization after a particular interval. The income statement is regularly utilized in a mix with a balance sheet statement.
This income statement template was developed for the small-business owner and has two example income statements, each on a different worksheet tab. The first is a simple single-step income statement with all revenues and expenses packed together. The second worksheet, shown on the right, is a multi-step income statement that determines Gross Profit and Operating Income.
Income Statement Template
Use for MS Word, OpenOffice, and Google Docs
A number of was can be followed to develop an income statement. two ways have been followed in this template are intended mainly for small service-based businesses or retail companies The simple “single-step” income statement groups all of the revenues and expenses, excluding the income tax expense. The “multi-step” income statement method breaks down the Gross Profit and Operating Income as separate lines. at first, It determines the Gross Profit by subtracting Cost of Goods Sold from Net Sales. It identifies the Operating Income and then adjusts for interest expense and income tax to deliver the Income from Continuing Operations.
Income Statement Formula
Net Income = Total Revenue – Total Expenses
“The income that is generated by rendering service, selling a product, earning interest on investments, renting extra office space, licensing technologies, selling advertising space, or licensing the use of your brand name. In the income statement template, there are categories for Sales revenue, Service revenue, Interest revenue, and Other revenue. You will likely want to customize the Revenue section to highlight your company’s main sources of revenue.”
“For a retail company, one of the main expenses is the cost of goods sold. For service businesses, this might not be such a large factor. Some of the other operating expenses may be advertising, salaries, rent, utilities, insurance, legal fees, accounting fees, supplies, taxes, etc.”
“In the multi-step income statement, the operating income is calculated as the Gross Profit minus the total Operating Expenses. In general, interest expense and income tax expense are not included as operating expenses, which gives rise to the term EBIT or “earnings before interest and taxes” – another name for Operating Income.”
Income from Continuing Operations
“This is the “bottom line”, calculated as the Operating Income minus interest expense and income tax (and plus/minus non-operating revenues, expenses, gains, and losses, if there are any). If there are no “below-the-line” items, then this is the same as the Net Income.”
“Some forms of income, such as the sale of a building you are no longer going to be using, are included “below-the-line” (i.e. below the reported Net Income from Continuing Operations) because they may not be expected to occur in the future. These include the effect of accounting changes, income from discontinued operations, and extraordinary items (gains or losses that are unusual or highly abnormal).”