The income statement is one among the major financial statements you can create—the others being the balance sheet, the statement of cash flows, and the equity statement for shareholders. The income statement is the documented financial statements of a company’s performance over an accounting period (yearly or quarterly). This is also called the profit-and-loss statement and is of utmost interest to managers, creditors, and investors for your company.
If you’re not sure where to start, look through this list for that perfect Statement Template to help you get this done with as less stress possible.
As you can see, there is no standard form for an income statement. However, the simplest Financial Statement Template (of which you can find examples on this page) and the most detailed Simple Profit & Loss Statement Template will have some key points in common.
A complete income statement will have these elements:
The operating section will itemize the revenues (cash inflows) and expenses (cash outflows) from the company’s transactions over the specified period of accounting time.
The nonoperating section details any profits and gains the company made from other activities that are infrequent and not the company’s primary activities. This also details the costs that are not tied to the actual business transactions, costs such as interest expense and income taxes.
The bottom line will state the subsequent net income (or net loss) for the period under scrutiny. Investors, shareholders, and managers hone in on this part immediately to see how the company is doing financially.
These free PDFs cover a range of simple income statements of various types, depending on your needs. An overview of some of the more distinct forms you might find useful: