Income Statement

Also known as:
Statement of Operations
Statement of Profit & Loss (P&L)

Sample Income Statement
Amounts in $Millions

Net Revenue $10,000
Cost of Goods Sold 4,500
Gross Profit 5,500

SG&A 2,000
Operating Income 3,500

Depreciation & Amortization 500
Interest Expense 150
Interest Income (100)
Miscellaneous Income (50)
Pre-tax Income 3,000

Income Taxes 1,200
Net Income $1,800
The income statement is a record of revenues earned during a period and the expenses incurred to generate those revenues. The result is net income or loss.

Revenue
Revenues are money made as a result of business activities.

Expenses
Expenses are the outflow of money used to generate revenues, including costs of products and services sold, wages, advertising and interest on company debt. Expenses can be divided into operating and non-operating.

Operating Expenses vs. Non-operating Expenses

Operating Expenses
Operating expenses are typical costs that a company incurs to support its core business activities.

Examples of operating expenses include:

• Cost of goods sold
• Selling expenses
• Research & development
• Depreciation & amortization

Non-operating Expenses
Non-operating expenses refer to expenses that are not directly related to core business activities. Financing and investing activities fall into this category.

Examples of non-operating expenses include:

• Interest expense
• Restructuring charges
• Write-downs