Income statement explained

What is an income statement? An income statement is an overview of how much a company has earned during a period. In analyzing the financial performance of a company, the income statement is where most people spend a lot of time. ⏱️TIMESTAMPS⏱️ 00:00 Understanding the income statement 01:06 Income statement case study 02:53 Top line and bottom line 03:27 Revenue 04:23 Cost of revenue 05:55 Gross margin 06:23 Operating expenses 07:53 Operating income 08:27 Other income 08:55 Provision for income taxes 09:43 Net income 10:42 Earnings per share The income statement is known under many names, each of these gives a hint of what we are trying to review in this income statement tutorial: consolidated statement of earnings, profit and loss statement, earnings report, statement of operations, statement of financial performance, or simply: the income statement. So in case you are unable to find the income statement for a company, try a search with any of these other names! Learning how to read an income statement is just like learning how to read anything else: I encourage you to go through lots of real world income statements for companies that you are interested in. By reviewing the income statement, and the notes that come with it in the annual report, you will at the same time learn a lot about how the business works. Let me show you how to read an income statement, using the financial statements of Microsoft as an example. To get a quick first impression, we take a look at revenue at the top of the #incomestatement, and net income at the bottom of the income statement. Also known as the top line and the bottom line. Net sales billed, and turnover, are sometimes used by other companies as a synonym for revenue. Net earnings and net profit are sometimes used as a synonym for net income. If CEOs or analysts discuss how revenue and net income have developed, they often refer to top line growth and bottom line growth. Philip de Vroe (The Finance Storyteller) aims to make #accounting, #finance and investing enjoyable and easier to understand. Learn the business and accounting vocabulary to join the conversation with your CEO at your company. Understand how financial statements work in order to make better investing decisions. Philip delivers #financetraining in various formats: YouTube videos, classroom sessions, webinars, and business simulations. Connect with me through Linked In!