1. Formulas related to income statement and comprehensive income

Formulas related to income statement and comprehensive income

Operating income (manufacturing company)

Sales revenue - cost of goods sold - operating expenses

Operating income (service company)

Sales revenue - operating expenses

Ending retained earnings

Beginning retained earnings +/- correction for prior period adjustments + net income (or - net loss) - dividends declared

Income from continuing operations (income statement)

Sales - cost of goods sold - operating expenses + other revenues and gains - other expenses and losses.

Net income (income statement)

Income from continuing operations +/- discontinued operations

Other comprehensive income

+/- cash flow from hedges (aka gain/loss on derivatives) +/- pension liability adjustments +/- unrealizable gains and losses on available for sale debt investments +/- foreign currency translation

Comprehensive income

Net income +/- cash flow from hedges (aka gain/loss on derivatives) +/- pension liability adjustments +/- unrealizable gains and losses on available for sale debt investments +/- foreign currency translation.

Comprehensive income (simplified formula)

Net income +/- Other comprehensive income