Income Statement Service Business

An income statement also known as a profit and loss statement provides detailed information about business revenues and expenses for a particular accounting period.

Income statement service business. Like all businesses one of the main financial statements a service company will prepare is the income statement. An income statement shows the net income or net loss of a business. An income statement also called a profit and loss statement lists a business s revenues expenses and overall profit or loss for a specific period of time. The income statement for a service company focuses on cost of sales and expenses.

This is achieved by deducting all expenses from all income. Your specific costs of sales are going to be. These three core statements are intricately used in both corporate finance including financial modeling what is financial modeling financial modeling is performed in excel to forecast a company s financial performance. Important to business owners.

Projected income statement abc cleaners year 1 year 2 year 3 revenue residential sales 508 806 596 643 650 256 up sales residential 176 976 207 528 226 176 commercial sales 0 0 0 vehicle cleaning sales. The statement covers the company s financial performance for a given period a. There is no space for inventory because there is no inventory in a service based business. The income statement is one of three statements three financial statements the three financial statements are the income statement the balance sheet and the statement of cash flows.

Therefore the income statement will be a basic breakdown of income and expenses. Since service based companies do not sell a product the income statement will not contain cost of goods sold. You classify those expenses that are directly related to the delivery of your service as costs of sales.