Understanding Income Statement Pdf

The balance sheet tells you where you are while the income statement tells you how you got there.

Understanding income statement pdf. Each step down the ladder in an income statement involves the deduction of an expense. Understanding your income statement 2020 financial year fact sheet salary and wages you are taxed on your salary and wages. The next is the income statement shown in figure 3 2 which provides information on the revenues and expenses of the firm and the resulting income made by the firm during a period. Your taxable salary and wage figure is included on your annual income statement1 formerly known as your payg payment summary and excludes the salary packaging payments.

Hence your salary packaging money is never subject to. Identifies the business the financial statement title and the time period summarized by the statement. The period can be a quarter if it is a quarterly income statement or a year if it is an annual report. Understanding the farm income statement part i the income statement is a report of the farm.

Here s how an income statement is usually. Exhibit 2 1 pre sents os distributors balance sheets at the end of years 1998 1999 and 2000. Marilyn will explain the content and purpose of the three main financial statements. Understanding an income statement is essential.

Your income statements are most powerful when used in tandem with your balance sheet and cash flow statements. 3 2 accounting equation in the balance sheet the assets of the business are equal to the liabilities. Intermediate components of the income statement it is common for companies to present some or all of the following sections and totals within the income statement. Net assets are total assets less total liabilities.

Statement of cash flows income statement marilyn points out that an income statement will show how profitable direct delivery has been during the time interval shown in the statement s heading. 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. Income statements and to facilitate the understanding of the logic behind these statements we use the fictitious firm office supplies distributors os distribu tors a nationwide distributor of office equipment and supplies. Presented on the face of the income statement when such presentation is relevant to an understanding of the company s financial performance.

The net assets equal the capital and reserves in the. The income statement is one of three financial statements that stock investors rely on the other two are the balance sheet and cash flow statement.