Also known as a Profit/Loss Statement, the Income statement shows your company’s revenue and expenses for a specific period of time.
In this video…
Hi, Greg here for On Track Business Management. In this video, we’ll be talking about your income statement, also known as the profit and loss statement.
I know you go straight to the bottom line when reviewing your income statement. Your net income is very important. Your income statement can also give you the information that can help you run your business. If you’re looking for ways to become more profitable, the income statement is the place to start.
The income statement is shown for a given period of time – a month, a quarter, a year. The income statement shows your company’s revenue, expenses, and net income. You can use the income statement to calculate my favorite ratio, the gross profit ratio. I’ll show you how to calculate your gross profit ratio in the ratio video in this series.
Your income statement can also be used to find break-even points. Comparing overhead from one year to another is also done with your income statement.
In the next video, we’ll continue learning about your income statement.
Next Video: Income Statement Part 2