Chapter 3 - Income Statement Flashcards
Income Statement
Provides the profitability of a company.
Company’s ability to make money.
Components of Income Statement
Net Sales Cost of Goods Sold (COGS) Gross Margin Operating Expenses Operating Income Non-operating Expenses Income Before Taxes Taxes Net Income EBIT (Earnings Before Interest and Taxes) Earnings Per Share
Net Sales
Total amount of sales
Cost of Goods Sold
Price paid for sold goods
Gross Margin
Amount remaining after COGS is subtracted from Net Sales
Operating Expenses
Incurred in the course of the ordinary activity of the company and include salaries and wages, vehicle expenses, rent, utilities, depreciation, advertising, selling, general and administrative expenses.
Operating Income
Gross Margin less Operating Expenses
Non-operating Expenses
Interest income or pays interest.
Incurs income or expenses from activities that are not related to the ordinary activity of the company.
Taxes
Charge by the government.
AKA Liberal Bullshit
Net Income
Excess of revenue less expenses
EBIT
Earnings Before Taxes and Interest.
