Income Statements

Income Statements - 28 th February 2008 1 Advantages of the...

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Unformatted text preview: 28 th February 2008 1 Advantages of the Income Statement Clearly states the income of a company Snapshot of a given time period Also shows the costs necessary to earn income Cost of Sales Labor expenses, interest expense, etc. Used as a tool to determine efficiency for a given business cycle 2 3 Revenues Increases in assets or settlement of liabilities from ongoing operations. Expenses Decreases in assets or increases in liabilities from ongoing operations. Gains Increases in assets or settlement of liabilities from peripheral transactions. Losses Decreases in assets or increases in liabilities from peripheral transactions. Operating Revenues Sales & Service Revenue Operating Expenses: Cost of Goods sold Wage, rent, selling, depreciation and amortization expense Other expenses and revenues- from activities that are not central to company operations 4 5 Operating Activities Peripheral Activities Income Stateme nt Net Sales 6 Cost of Goods Sold = Gross Profit Operating Expenses = Operating Income /- Gains and Losses = Income Before Taxes- Income Tax = Net Income Earnings Per Share EPS: Equal to 7 Net Income Weighted Average Number of Common Shares Outstanding Gross Profit/ Gross Profit...
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This document was uploaded on 10/08/2008.

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Income Statements - 28 th February 2008 1 Advantages of the...

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