An income statement, also known as a profit and loss statement, presents a company's revenues and expenses over a specific period of time. Here are some key accounts typically found on an income statement:
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Revenues/Sales: The total income generated from selling goods or services.
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Cost of Goods Sold (COGS): The direct costs attributable to the production of the goods sold by a company.
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Gross Profit: The difference between revenues and COGS.
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Operating Expenses: These are the expenses related to the normal operations of the business, which may include:
- Selling, General, and Administrative Expenses (SG&A)
- Research and Development (R&D)
- Depreciation and Amortization
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Operating Income: Gross profit minus operating expenses.
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Other Income/Expenses: This can include non-operating income (like investment income) and non-operating expenses (like interest expenses).
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Income Before Tax: The income earned before taxes are deducted.
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Income Tax Expense: The tax obligation of the company based on its earnings.
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Net Income: The final profit or loss after all revenues and expenses (including taxes) have been accounted for.
These accounts provide insights into a company's financial performance over the reporting period.
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