Income Statement For Small Business Example

Watch your overhead expenses like a hawk.

Income statement for small business example. An example of financial statements for a small business owner is a business owner should also include information regarding the payment of employee taxes to the state in which the business is incorporated and is based. The income statement is sometimes called the profit and loss statement or p l. The income statement records all revenues for a business during this given period as well as the operating expenses for the business. The first is a simple single step income statement with all revenues and expenses lumped together.

On the example broad street emporium income statement operating expenses reflect staff salaries advertising costs and production and delivery of the store s catalog three times a year. The subtraction of both results in the net income which is accurately calculated. The transaction on 31st of january is a dividend payment which is not an expense. Use only those categories that pertain to your small business.

Continuing the worksheet example the income statement can be derived from the expenses and revenue which were added to retained earnings transactions on 10 15 and 26 january. You may also see sample income. Companies monitor their income performance to determine their losses and gains and financial consultants and advisors are hired to help them prepare and review financial statements to know their strengths and weaknesses and how they can do better. In any business setting finances will be a big topic.

An income statement otherwise known as a profit and loss statement is a summary of a company s profit or loss during any one given period of time such as a month three months or one year. This information is also important when the business is planning on hiring employees. Example profit and loss statement total revenue 1 000 000 100 less cost of goods sold 426 200 42 6 gross profit. In addition the company takes depreciation expenses for its storefront building computer system and delivery van.

The balance sheet and the income statement are two of the three major financial statements that small businesses prepare to report on their financial performance along with the cash flow statement. These topics will show you the connection between financial statements and offer a sample balance sheet and income statement for small business.