Every business, whether big or small, will generate an income statement. This is an important piece of financial document that reflects the business’ financial state, especially on the monies flowing in to the business. You can also use an income statement as an individual to track your financial condition.
An income statement is quite straightforward in its structure and format. It records the financial transactions of the business to reflect the financial health of the business. It is compiled throughout the year for an annual formal display to the shareholders of the company and its board of directors.
The basic information kept in an income statement includes revenue, cost of sales, operating expenses, net income or loss. Each of these categories registers the details covered. Every cent in and out of the company is recorded for good accountability.
The income statement also has two columns to compare the financial values for the current month and year-to-date. Each column records the amount and percentage for every item listed under the different categories.
The Income Statement template may contain:
* Company Name
* Company Address
* Income Statement Date
* Period ending date
* Gross sales
* Net sales
* Cost of Sales
* Operating Expenses
*General / Administrative expenses
* Net Income / Loss
Depending on the computation among the Revenue, Cost of Sales and Operating Expenses, the Income Statement will register a Loss or Profit.
Consider the attached sample template for your convenience.