Income Statement Example

 

The income statement is a company’s financial report of how the revenue they earned from the sales of their goods or services is transformed into net income. Net income is the final result after all of the expenses have been subtracted from the revenues.

For example: If ABC company sold 100 widgets for $10 each, then their revenues would be $1,000. Money that ABC company had to spend to make and sell their 100 widgets would be expenses such as material costs, selling costs, and advertising costs. If ABC company spent $900 making and selling the widgets, then their net income, or profit, would be $100.

So again, revenues are NOT income or profits… revenue is the amount of money that a company makes before any expenses are taken out. Net income, or net profit, is what is left of the revenues after all of the expenses are applied against the revenue.

Here is an example of a simple income statement:

Income statement example

 

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