Income Statement Components

Front

Income from sales, calculated as Units sold × Cost per unit. Example: Selling 100 items at $10 each = $1000.

Back

Revenue

Front

Cost of producing or purchasing goods sold, calculated as Opening inventories + Purchases - Closing inventories. Example: $200 + $600 - $150 = $650.

Back

Cost of Sales

Front

Revenue minus Cost of Sales, showing profitability before overheads. Example: $1250 - $900 = $350.

Back

Gross Profit

Front

Overhead costs, such as rent, utilities, salaries. Example: A shop pays $155 for rent and utilities.

Back

Expenses

Front

Gross Profit minus Expenses, showing overall profitability. Example: $350 - $155 = $195.

Back

Net Profit

Front

Net Profit after taxes and dividends, reinvested in the business. Example: $195 after taxes/dividends funds new equipment.

Back

Retained Profit