C213 - ch 4 income statement

gross profit

the difference between the selling price of a product and the cost of the product

operating income

gross profit minus all other expenses except for interest and taxes. measures performance of the fundamental business operations conducted by a company

income from continuing operations

operating income minus interest expense, minus tax expense, and plus or minus other misc rev and expense items, and gains and losses from peripheral transactions and events. best baseline from which to forecast a co’s income for the following year

net income

income from continuing ops ±/- the results of discontinued operations and extraordinary items, net of their respective income tax effects. includes all revenues, expenses, gains and losses

comprehensive income

net income ±/- adjustments for changes in company wealth stemming from changes in certain exchange rates, interest rates or financial instruments’ values

single step income statement

groups all of the revenues and all of the expenses, and reports the overall difference as net income

multiple step income statement

emphasizes the presentation of gross profit and operating income