Income Statements

An income statement shows the profitability of a company within a given period, revealing the company’s company’s revenues, costs, expenses, and losses, all in a logical manner.

The standard components of an income statement are all listed below:

Revenue or Net Sales

Money that the company receives through the sale of its products and services

Costs of Sales or Costs of Goods Sold

Costs that go into the production of the aforementioned goods and services.

Gross Margin

This is the difference between the two concepts described above.

Operating Expenses

This includes the costs that the company incurs which do not include the cost of sales.

Operating Income

This includes the income from the normal operations after paying the operating expenses

Other Income and Expenses

This is the income earned not through the sale of its products and services but through their investments.

Provision for Income Taxes

This is the income that the company sets aside to pay its taxes.

Earnings per Share

This is the difference between net income and the dividends on preferred stocks over the average shares outstanding.

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