Income Statement For Your Business

An income statement reports a business s revenues expenses and overall profit or loss for a specific period of time.

Income statement for your business. An income statement is also referred to as a profit and loss statement or p l statement. An income statement is a financial statement that shows you how profitable your business was over a given reporting period. An income statement also known as a profit and loss statement provides detailed information about business revenues and expenses for a particular accounting period. The current period plus two prior periods.

It starts by taking account of all the company revenue streams and subtracting its expenses. It s one of the three major financial statements that small businesses prepare to report on their financial performance along with the balance sheet and the cash flow statement. What is an income statement. The total revenue minus total expenses which gives the profit or loss the end goal of the income statement is to show a business s net income for a specific reporting period.

All your business expenses for a given period. The outcome of the combination of these elements demonstrates how much money your business made or will make or lost or will lose during the year. The income statement actually covers four key areas revenue expenses gains and losses. This document is where you record revenue expenses capital and cost of goods.

The income statement measures all your revenue sources vs. If it s a negative number the business reports a loss. The income statement is where you make a case for your business potential to generate cash. Normal practice is to include three accounting periods on an income statement.

Income statements summarize the financial activities of a business during a particular accounting period which can be a month quarter year or some other period of time that makes sense for a business s needs. This is because it deals primarily with a company s profit and loss. It shows your revenue minus your expenses and losses. Let s consider an apparel manufacturer as an example in outlining the major components of.