How To Read An Income Statement For Dummies

Identifies the business the financial statement title and the time period summarized by the statement.

How to read an income statement for dummies. Watch the next lesson. Generally an income statement is read from the top most line item all the way down to the bottom. The basic suite of financial statements a company produces at least annually consists of the statement of cash flows the balance sheet or statement of financial position and the income statement. At the top of an income statement you see the phrase years ended or fiscal years ended and the month the period ended for an annual financial statement.

Income statements reflect an operating period which means that they show results for a specific length of time. Similarly when analyzing an income statement you should first look at the gross profit margin before moving on to operating income margin and finally net profit margin. That s why net profits are often called the bottom line figure. The income statement also known as the profit and loss p l statement is the financial statement that depicts the revenues expenses and net income generated by an organization over a specific.

Statement of operating results. This example financial report is designed for you to read from the top line sales revenue and proceed down to the bottom line net income. The income statement revenue gross profit operating profit net income roa and roe. Here s how an income statement is usually.