Income Statement Overview

These flashcards cover key concepts and terminology related to the income statement as discussed in the lecture.

Income Statement

A financial statement that summarizes revenues and expenses over a specific period to determine net income.

Net Income

The total profit of a company after all expenses, taxes, and costs have been subtracted from total revenue.

Revenue

The income generated from normal business operations, typically from the sale of goods and services.

Expenses

The costs incurred in the operation of a business, deducted from revenue to generate net income.

Gross Profit

Sales revenue minus the cost of goods sold, indicating the efficiency of production and pricing.

Operating Income

The profit realized from a business's normal activities, calculated as gross profit minus operating expenses.

Earnings Before Interest and Taxes (EBIT)

A measure of a firm's profit that includes all incomes and expenses except interest and income tax expenses.

Bottom Line

A colloquial term used to refer to net income, the final line on the income statement.