Financial Management 101: Introduction to Business Finance-Income Statement

Income Statement

Pdf Summary

This Income Statement follows a % of Sales Model for the period mm/dd/yyyy to mm/dd/yyyy. The Net Revenue for this period was $1,000,000, representing 100% of sales. The Cost of Sales was $798,000, which translates to 79.8% of sales, resulting in a Gross Margin of $202,000 or 20.2%. <br /><br />The statement then breaks down the various expenses. Payroll Expenses include Total Salaries, Wages, Commission & Bonuses of $80,000 (8% of sales), Payroll Taxes of $10,000 (1% of sales), Group Insurance of $7,000 (0.7% of sales), and Employee Benefits of $3,000 (0.3% of sales). The Total Payroll Expenses amount to $100,000 or 10% of sales. <br /><br />Occupancy Expenses consist of Utilities, Telephone, Building Repairs and Maintenance, Rent or Ownership in Real Estate, and Property Insurance & Real Estate Taxes, amounting to a total of $17,000 or 1.7% of sales. <br /><br />Other Operating Expenses include items such as Advertising and Sales Promotion, Vehicle Expenses, Insurance, IT Expenses, Depreciation & Amortization, Professional Fees, Travel and Entertainment, Office Supplies, Bad Debt Losses, and All Other Operating Expenses, resulting in a total of $39,000 or 3.9% of sales. <br /><br />The Total Operating Expenses add up to $156,000 or 15.6% of sales. This leaves an Operating Profit of $46,000 or 4.6% of sales. <br /><br />Other sections of the statement include Rental Purchase Option Interest Income of $0, Other Income of $3,000 (0.3% of sales), Interest Expense of $19,000 (1.9% of sales), and Other Non-Operating Expenses of $0. The Profit Before Taxes is calculated as $30,000 or 3% of sales, with Taxes amounting to $15,000 or 1.5% of sales. <br /><br />Finally, the Net Profit After Tax is determined as $15,000 or 1.5% of sales.

Keywords

Income Statement

% of Sales Model

Net Revenue

Cost of Sales

Gross Margin

Payroll Expenses

Occupancy Expenses

Other Operating Expenses

Operating Profit

Net Profit After Tax