Chapter 5

The Income Statement

In This Chapter

arrow Getting acquainted with the income statement

arrow Considering different types of revenue

arrow Determining a company’s expenses

arrow Analyzing a company’s finances using profits and losses

arrow Figuring out earnings per share

Every businessperson needs to know how well the business has done over the past month, quarter, or year. Without that information, he has no idea where his business has come from and where it may go next. Even a small business that has no obligation to report to the public is sure to do income statements on at least a quarterly or (more likely) monthly basis to find out whether the business made a profit or took a loss.

remember The income statement you see in public financial statements is likely very different from the one you see if you work for the company. The primary difference is the detail in certain line items.

This chapter reviews the ...

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