Income Statement (Internal)

Net Sales (1)

Sales Revenue - Sales return and allowances - sales discounts

Gross Profit (2)

Net Sales - Cost of Goods Sold

Income from operations (3)

Gross profit - operating expenses

Income before income tax expense (4)

Income from operations + other revenues and gains - other expenses and losses

Net income (loss) (5)

Income before income tax expense - income tax expense

Operating expenses

Salaries and wages, utilities, depreciation, supplies, advertising, rent, freight-out, insurance, office, and travel

Other revenues and gains

Interest revenue, gain on disposition, dividend revenue and rent revenue

Other expenses and losses

interest expense, casualty losses, loss on disposition

Gross profit percentage

Gross product/Net sales

Gross profit calculation

Sales (less) Sales returns and allowances and sales discounts = Net sales minus CGS equals

Cost of Goods Sold calculation

Beginning inventory + net purchases (purchases-returns and discounts + freight-in) = CGAS - Ending Inventory =

Shrinkage estimation calculation

Inventory per books (balance in inventory) - actual inventory =