Income statement example

Income statement example

Income statement example

An income statement, also known as a profit and loss statement, provides a summary of a company’s revenues, expenses, and net income or loss over a specific period of time, typically a quarter or a year. Here’s an example of a simplified income statement for a fictional company:

XYZ Company Income Statement for the Year Ended December 31, 20XX



Sales of Products         $500,000

Service Revenue           $150,000

Total Revenue               $650,000



Cost of Goods Sold        $250,000

Salaries and Wages        $150,000

Rent Expense              $40,000

Utilities Expense         $15,000

Advertising Expense       $20,000

Depreciation Expense      $10,000

Interest Expense          $5,000

Total Expenses              $490,000


Net Income (Profit)         $160,000

In this example:

Income statement example

Income statement example

  1. Revenue: This section lists all sources of income for the company. In this case, there are two sources: sales of products and service revenue. The total revenue is the sum of these two sources, which is $650,000.
  2. Expenses: This section lists various expenses incurred by the company during the specified period. Common expenses include the cost of goods sold (the cost to produce the products sold), salaries and wages, rent, utilities, advertising, depreciation, and interest. The total expenses are $490,000.
  3. Net Income (Profit): The net income is calculated by subtracting the total expenses from the total revenue. In this example, the net income is $160,000, which represents the profit earned by the company during the specified year.

This is a simplified example, and in a real-world income statement, there may be additional details, categories, and subtotals. Income statements are an essential financial tool for businesses as they provide insights into a company’s profitability and financial performance over a specific period. They are also used by investors, creditors, and analysts to assess a company’s financial health and make informed decisions.

243 KB