#businessarticle3 #incomestatement #businessnewshub3

Income statement example 

By Lona Matshingana 

2025/12/27

An income statement (also known as a Profit and Loss or P&L statement) summarizes a company's financial performance over a specific period. It follows a simple logical flow: Revenue - Expenses = Net Income.

Below is a typical example of a "Multi-Step" income statement for a small retail or product-based business.

Income Statement: ABC Tech Solutions
For the Year Ended December 31, 2025

| Item | Amount | Subtotal |
|---|---|---|
| Total Revenue (Sales) | | $250,000 |
| Cost of Goods Sold (COGS) | | ($100,000) |
| --- | --- | --- |
| Gross Profit | | $150,000 |
| | | |

| Operating Expenses | | |
|     Salaries & Wages | $60,000 | |
|     Rent & Utilities | $15,000 | |
|     Marketing & Advertising | $10,000 | |
|     Depreciation | $5,000 | |
| Total Operating Expenses | | ($90,000) |
| --- | --- | --- |
| Operating Income (EBIT) | | $60,000 |
| | | |
| Interest Expense | | ($2,000) |
| Other Income (e.g., Interest earned) | | $1,000 |
| --- | --- | --- |
| Pre-Tax Income | | $59,000 |
| Income Tax Expense (20%) | | ($11,800) |
| --- | --- | --- |

| NET INCOME (Bottom Line) | | $47,200 |
Key Terms Explained

 * Revenue: The "Top Line." This is the total money coming in from selling products or services before any costs are taken out.
 * Cost of Goods Sold (COGS): The direct costs of producing your product (raw materials, factory labor).
 * Gross Profit: Tells you how efficiently you are producing your goods (Revenue - COGS).
 * Operating Expenses: The "overhead" costs needed to keep the lights on (rent, office salaries, marketing).
 * Operating Income (EBIT): Your profit from core business activities before interest and taxes.
 * Net Income: The "Bottom Line." This is the actual profit remaining for the owners or to be reinvested in the business.

Quick Tips for Reading This
 * The Header: Always check the time frame. Is this for a month, a quarter, or a full year?
 * Parentheses: In accounting, numbers in brackets like ($10,000) mean they are being subtracted (negative values).
 * Margin Analysis: You can calculate your Gross Margin by dividing Gross Profit by Revenue (150,000 / 250,000 = 60\%).

Thank you for reading!!! 

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