income statement Flashcards
What does the income statement represent.
Represents a company’s operating performance over a period of time (a fiscal year)
through a summary of the company’s revenues and expenses, showing net earnings (profit) or
loss.
What are Net Revenues ?
Total dollar payment for goods and services that are credited to an income statement
What are Cost of Goods/Sales ?
represents a company’s direct cost of manufacture (for
manufacturers) or procurement (for merchandisers) of a good or service
How to calc Gross Profit/Margin
Revenues - Cost of Goods Sold
What are Selling, General &
Administrative (SG&A)?
Operating costs not directly associated with the production or procurement of the
product or service that the company sells to generate revenue. (ex: Payroll, wages,
commissions, meal and travel expenses, stationary, advertising, and marketing
expenses fall under this line item.)
What is Research &
Development (R&D)?
A company’s activities that are directed at developing new products or procedures.
What is EBITDA?
Earnings before interest, taxes, depreciation & amortization. (popular measure of a company’s financial performance)
How is EBITDA calc?
EBIT + D&A
What is Depreciation &
Amortization (D&A)?
The allocation of cost over a fixed asset’s useful life in order to match the timing of the cost of the asset with when it is expected to generate revenue benefits.
What is Other Operating
Expenses / Income?
Any operating expenses not allocated to COGS, SG&A, R&D, D&A
How is EBIT calc?
Gross Profit - SG&A -
R&D
What is Interest Income
A company’s income from its cash holdings and investments (stocks, bonds, and
savings accounts).
What are Unusual or Infrequent
Income / Expenses
Gain (loss) on sale of assets, disposal of a business segment, impairment charge,
write-offs, restructuring costs.
What is Income Tax Expense?
The tax liability a company reports on the income statement.
How to calc Net Income?
EBIT - Net Interest Expense - Other Nonoperating Income - Taxes
