What is an income statement?
An income statement sets out your company income versus expenses, to help calculate profit. You’ll sometimes see income statements called a profit and loss statement (P&L), statement of operations, or statement of earnings.
Income statements can be created to analyze and compare business performance over a month, a quarter or a year, and are an effective tool to review cash flow and predict future business performance.
Smart business owners use income statements alongside other key financial documents, like the balance sheet and cash flow statement, to check up on and improve the health of their businesses.
Download an income statement template.
Basic income statement
Download your free simple income statement in Excel. Customize and plug in your business numbers, to make analyzing your company performance easy.
Traditional income statement
Multi-step income statement
Use the free template to create your multiple step income statement in Excel, and get an in depth report of your net business profit or loss.
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Income statement format.
Income statement formula.
The single step income statement formula is:
Total Revenues - Total Expenses = Net Income
An income statement compares company revenue against expenses to determine the net income of the business.
Subtract operating expenses from business income to see your net profit or loss. If revenues are higher than total business expenses, you’re making a profit. If your business expenses over the period being examined were higher than your income, the company has made a loss.
This calculation is useful for business owners and investors as it shows the net profitability of a business, and how efficient a company is at generating net income.
Income statements give a snapshot view of business performance - create a monthly, quarterly or annual statement, which you can analyze and compare to performance over the same period in previous years.
How to create the profit and loss statement template?
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