Indzara - Simple and Effective Templates | Income Statement Simplified - Create your income statement in Excel @indzara | Uploaded 2 years ago | Updated October 03 2023
Create your income statement in 4 simple steps (one step is optional). Learn income statement definition & view samples. 7 parts of an income statement. Income statement format & formulas.
Download free Income Statement template: https://indzara.com/2021/08/income-statement/
Small Business Excel Templates: https://indzara.com/small-business-excel-templates/
Small Business Finance Manager template: https://indzara.com/product/small-business-finance-manager-excel-template/
Agenda
1. What is an Income statement?
2. 3 Income statement Examples (Microsoft, Tesla, Apple)
3. Income Statement format & structure
4. Create Microsoft's income statement in Excel
5. How to create your own income statement?
Chapters
00:00 Introduction & 5 topics for the video
01:30 Income Statement Definition
02:50 Income Statement Examples (Microsoft, Tesla, Apple)
12:05 7 parts of an income statement
12:35 Income Statement format
15:12 Creating Microsoft's Income statement in Excel
17:07 Creating your income statement in 4 simple steps
22:53 Benefits of free Income Statement Excel Template
24:02 Recommended Excel Templates
An income statement is a financial statement of a company that shows the company’s revenues and expenses during a specific period. It is a representation of the ‘profitability’ of a company.
In order to understand the structure and parts of an income statement, let us take a look at some example income statements from three well-known companies, Microsoft, Apple and Tesla. These are available to download from the companies’ websites.
There are 7 key sections that I could see.
1. Sales or Revenue: This typically represents the sales amount of products and services shipped out to customers during the period. Whether the customers have made the payments to Microsoft is immaterial when it comes to the Income statement. When the cash actually flows into Microsoft will be reflected in a different financial statement (Cash Flow Statement).
This is called the top line.
2. Cost of Sales or Cost of Revenue
a. This is the direct cost of producing the goods. This will typically include raw materials, labor, shipping costs and other costs which were needed to build the inventory and deliver the products and services which generated the sales in the previous section.
Also called as Cost of Goods Sold or COGS.
3. Gross Margin: This is the amount left over from sales after removing the cost of Sales. This is a good indicator of the margin of our products or services. This is sometimes called Gross Profit.
4. Operating Expenses: This represents the expenditure incurred by a company for operating or running the business. This includes salaries, rent and utility bills like electricity and water.
Common grouping of Operating Expenses are
i. Sales & Marketing expenses
ii. Research & Development (R&D) expenses
iii. General & Administrative (G&A) expenses
These are sometimes called SG&A (Sales, General & Administrative) expenses.
5. Operating Income or Income from Operations: This is the net income for the company subtracting Operating expenses from Gross Margin. This represents a true profit margin of a company because it considers all expenses involved in running the business.
6. Other Income/Expense Net
Apart from the business operations, if there are other income and expenses they are recorded in this section. This section will include income tax payments.
For example, if a company sells its real estate for a profit, that will be non-operating income. Paying interest on a loan is non-operating expense, while receiving interest on a bank account will be non-operating income. Income Tax payments will be an expense.
7. Net Income: Net Income represents the total net income of a company, considering both the operating and non-operating incomes and expenditures. If this amount is positive, that would indicate profit. If negative, it will be a loss. This is also referred to as the bottom line of a company.
4 simple steps to create your own statement for your business
Step 1: Define categories and subcategories
Step 2: Customize Terms (optional)
Step 3: Enter transactions or entries
Step 4: Customize Income statement
Create your income statement in 4 simple steps (one step is optional). Learn income statement definition & view samples. 7 parts of an income statement. Income statement format & formulas.
Download free Income Statement template: https://indzara.com/2021/08/income-statement/
Small Business Excel Templates: https://indzara.com/small-business-excel-templates/
Small Business Finance Manager template: https://indzara.com/product/small-business-finance-manager-excel-template/
Agenda
1. What is an Income statement?
2. 3 Income statement Examples (Microsoft, Tesla, Apple)
3. Income Statement format & structure
4. Create Microsoft's income statement in Excel
5. How to create your own income statement?
Chapters
00:00 Introduction & 5 topics for the video
01:30 Income Statement Definition
02:50 Income Statement Examples (Microsoft, Tesla, Apple)
12:05 7 parts of an income statement
12:35 Income Statement format
15:12 Creating Microsoft's Income statement in Excel
17:07 Creating your income statement in 4 simple steps
22:53 Benefits of free Income Statement Excel Template
24:02 Recommended Excel Templates
An income statement is a financial statement of a company that shows the company’s revenues and expenses during a specific period. It is a representation of the ‘profitability’ of a company.
In order to understand the structure and parts of an income statement, let us take a look at some example income statements from three well-known companies, Microsoft, Apple and Tesla. These are available to download from the companies’ websites.
There are 7 key sections that I could see.
1. Sales or Revenue: This typically represents the sales amount of products and services shipped out to customers during the period. Whether the customers have made the payments to Microsoft is immaterial when it comes to the Income statement. When the cash actually flows into Microsoft will be reflected in a different financial statement (Cash Flow Statement).
This is called the top line.
2. Cost of Sales or Cost of Revenue
a. This is the direct cost of producing the goods. This will typically include raw materials, labor, shipping costs and other costs which were needed to build the inventory and deliver the products and services which generated the sales in the previous section.
Also called as Cost of Goods Sold or COGS.
3. Gross Margin: This is the amount left over from sales after removing the cost of Sales. This is a good indicator of the margin of our products or services. This is sometimes called Gross Profit.
4. Operating Expenses: This represents the expenditure incurred by a company for operating or running the business. This includes salaries, rent and utility bills like electricity and water.
Common grouping of Operating Expenses are
i. Sales & Marketing expenses
ii. Research & Development (R&D) expenses
iii. General & Administrative (G&A) expenses
These are sometimes called SG&A (Sales, General & Administrative) expenses.
5. Operating Income or Income from Operations: This is the net income for the company subtracting Operating expenses from Gross Margin. This represents a true profit margin of a company because it considers all expenses involved in running the business.
6. Other Income/Expense Net
Apart from the business operations, if there are other income and expenses they are recorded in this section. This section will include income tax payments.
For example, if a company sells its real estate for a profit, that will be non-operating income. Paying interest on a loan is non-operating expense, while receiving interest on a bank account will be non-operating income. Income Tax payments will be an expense.
7. Net Income: Net Income represents the total net income of a company, considering both the operating and non-operating incomes and expenditures. If this amount is positive, that would indicate profit. If negative, it will be a loss. This is also referred to as the bottom line of a company.
4 simple steps to create your own statement for your business
Step 1: Define categories and subcategories
Step 2: Customize Terms (optional)
Step 3: Enter transactions or entries
Step 4: Customize Income statement
