Income Statements 101
An income statement shows your company’s revenue and expenses over time. Here’s how to make one:
- Revenues: Start with all income sources like sales revenue and other income.
- Subtract Costs: Deduct the cost of goods sold (COGS) to find the gross profit.
- Deduct Expenses: Subtract operating costs like rent, utilities, salaries, and marketing expenses.
- Account for Taxes and Interest: Include taxes, interest, and other non-operating expenses to find the net income.
A clear income statement helps you see your profitability and manage expenses. It shows how well your business is performing and where you can improve. Regularly reviewing your income statement helps in making informed business decisions. It shows if your revenue covers your expenses and helps plan for future growth. Understanding this statement is key to managing your business’s financial health. It allows you to pinpoint which areas of your business are most profitable and where you might need to cut costs or increase revenue.
Have questions or need assistance? Reach out to us anytime at 480 747 3935, visit our website for more information, or schedule a chat directly with Chris, via Calendly. We’re here to help!
