Income Statement Flashcard

Front

What is the primary purpose of an income statement?

Back

To track a company's revenue, expenses, gains, and losses during a set period

Front

What valuable insights does an income statement provide?

Back

Insights into a company’s operations, management efficiency, and performance relative to industry peers

Front

What does an income statement show about a business?

Back

The business's revenue, expenses, gains, and losses, starting with revenue and ending with net income

Front

What does COGS stand for in an income statement?

Back

Cost of Goods Sold

Front

What is revenue?

Back

The money generated from normal business operations

Front

What does Cost of Goods Sold (COGS) refer to?

Back

The direct costs of producing the goods sold by a company

Front

What is gross profit?

Back

A company's profit after deducting costs associated with producing and selling its products or services.

Front

How is gross profit calculated on a company's income statement?

Back

By subtracting the cost of goods sold from total revenue

Front

What is the formula for calculating gross profit?

Back

Revenue - Cost of Goods Sold (COGS)

Front

What is another term for net income?

Back

Net earnings