income statement

Profit and loss statement

The traditional name for an income statement

Ratio

Created one one number is divided into another

Categories

A business needs to be able to see how these affect each other and the bottom line

Cost of goods sold

The element of the income statement includes all direct costs to obtain and produce the goods or services that a business sells

Gross profit

Total profit made before all remaining expenses have been deducted

Net income

The bottom line

Sales growth ratio

This ratio is used to determine revenue over time

Industry standards

Even if business is earning profit, it needs to know how it is doing according to

Income minus expenses

The calculation used to analyze information from the income statement

Competitive analysis

Helps a business see its strengths and weaknesses in relation to those of its competitors

Managers

These people look at ratios to monitor business operations

Creditors

These people use information from the income statement to determine if the business gets a loan

Net income

An element of the income statement that informs the business of just how much money it is making

Financial ratios

When analyzing an income statement, a business turns its financial numbers into

Income statements

Summarizes where businesses money comes from and where it went

Profit

The income left over once all expenses are paid

Operating statement

Another name for the income statement because it is used to make a variety of business decisions

Revenue

Any money made from the sale of the business's goods and services

Stockholders

These people have a part ownership of a business

Potential investors

These people need to know whether the business expects to make a profit and how large the business expects that profit to be