Income Statement Of Analysis

Ecolab inc consolidated income statement.

Income statement of analysis. The income statement is broken into. The income statement communicates how much revenue the company generated during a period and what cost it incurred in connection with generating that revenue. Figure 13 1 income statement trend analysis for shows that net sales increased by 4 129 000 000 or 13 3 percent. The income statement breaks down the revenue a company earns against the expenses involved in its business to provide a bottom line net income profit or loss.

The common size or vertical analysis of income statement is the statement where each line item is expressed as a percentage of sales. With this method of analysis of financial statements we will look up and down the income statement hence vertical analysis to see how every line item compares to revenue as a percentage. The increase in net sales. For example in the income statement shown below we have the total dollar amounts and the percentages which make up the vertical analysis.

The comparison of each number becomes easier when compared as a percentage of sales. For example you can compare one company s profits to its competitors by examining its gross profit margin operating profit margin and net profit margin. Cost of goods sold had a corresponding increase of 1 605 000 000 or 14 5 percent. 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.

It is one of the three core financial statements the others being the balance sheet and the cash flow statement. Income statement analysis investors can use income statement analysis to calculate financial ratios that can be used to compare the same company year over year or to compare one company to another. Income statement analysis may 25 2020 the analysis of the income statement involves comparing the different line items within a statement as well as following trend lines of individual line items over multiple periods. The income statement presents information on the financial results of a company s business activities over a period of time.