Income Statement

Front 1

Income Statement
Profit&Loss Statement
Earnings Statement
P&L

Back 1

[Sales - Costs & Expenses = Income]
Income statement gives perspective on the health of a business - its profitability. Made for a specific period of time.

Front 2

Invoice

Back 2

Sth like Bill

Front 3

Expenditures

Back 3

costs and expenses become expenditures when money is actually sent to vendors to pay for them.

Front 4

Costs

Back 4

It's what you spend when you buy(or make) products for inventory.

Hint 4

Eg.
Expenditures for:
* raw materials
* workers' wages
* manufacturing overhead and so forth.
* When this inventory is sold, that is, shipped to customers, its total cost is taken out of inventory and entered in the Income Statement as a special type of expense called cost of goods sold.

Front 5

Cost of goods sold (COGS)

Back 5

Costs become CGS when inventory is shipped and becomes sale.

Front 6

Inventory

Back 6

when the company made the product, it took all the product's costs and added them to the value of inventory.

Front 7

Costs road

Back 7

Costs(when money are actually paid) ->
Inventory(when product is made) ->
CGS (when product becomes sale)

Front 8

Gross margin
Gross profit
Company's manufacturing margin

Back 8

[Gross Margin = Sales - CGS]
Amount left over from sales after product manufacturing costs(CGS) are subtracted.

Front 9

Expenses

Back 9

All other business expenditures which are not Costs. It's money spent to
*developing product
*selling it
*accounting for it
*managing this whole making and selling process.

Front 10

Operating Expenses
Sales General and Administrative expenses(SG&A)

Back 10

Expenditures that a company makes to generate income.

Front 11

Common groupings of operating expense

Back 11

* Sales & Marketing expense
* Research & Development(R&D) expenses
* General & Administrative(G&A) expenses.

Front 12

Income From Operations

Back 12

[Income from operations = Sales - Costs & Expenses].

Front 13

Non-operating Income

Back 13

-

Hint 13

Eg.
Receiving interest on cash balances in the company's bank account.

Front 14

Non-operating Expense

Back 14

-

Hint 14

Eg.
Paying interest on a loan.

Front 15

Income
Earnings
Profit
Bottom line of income statement

Back 15

[Income = revenue - costs & expenses]

Front 16

Operating on cash basis

Back 16

Income is measured when cash is received and expenses are measured when cash is spent.
When the books on a cash basis, Income Statement and the Cash Flow Statement are the same.
In general, people run their lives on a cash basis, but most businesses run their books on an accrual basis.

Front 17

Operating on accrual basis

Back 17

Income and expenses are measured when the transactions occur regardless of the physical flow of cash.

Front 18

Retained earnings

Back 18

[retained earnings = sum of all profits - sum of all dividends]
All of the company's profits that have not been returned to the shareholders as dividends.