Income Statement

It is in any company’s best interest (or required by law for public companies) to generate the income statement periodically, along with the balance sheet, the cash flow statement, and the statement of shareholders’ equity. The income statement shows, in a snapshot, the revenue, expenses, and the operating profit or loss for the period. A company may present the document to a financial institution or business partner to prove its financial standing.

As mentioned, the income statement is one of the four fundamental accounting statements in corporate finance. This document is usually published quarterly and annually. Individual businesses may also create monthly income statements for internal use.

What Is an Income Statement?

The Income Statement lists the revenue (may or may not be broken down by sources), expenses, and a loss or profit for the period based on the two. This document is published periodically and can be used as proof of solvency. A company’s Income Statements play a role in any decisions related to investing and borrowing. Lenders and investors often require a company to submit their income statements to assess risk.

Other Names for Income Statement

Depending on the context and industry jargon, the Income Statement may also be known as:

• Profit and Loss Statement

• Profit and Loss Report

• Income Report

• Net Income Statement

• Statement of Earnings

Who Needs an Income Statement

Companies need an Income Statement for evaluation purposes, including the solvency status. The law and the SEC require public companies to publish their Income Statements periodically. Companies may also need Income Statements when doing business with banks and business partners.

If the annual income statement shows profitability, a company may have a higher chance of getting approved for a loan or entering a partnership.

Why Use Swyft Forms for Your Income Statement

Customized for you, by you

Create your own documents by answering our easy-to-understand questionnaires to get exactly what you need out of your Income Statement.

Specific to Your Jurisdiction

Laws vary by location. Each document on Swyft Forms is customized for your state.

How to Create an Income Statement with Swyft Forms

The Income Statement is a critical document illustrating if a company is profitable for the period. Instead of creating the report yourself, you can rely on Swyft Forms to create professional income statements containing everything you need for internal or public consumption.

Let Swyft Forms help with our extensive library of attorney-vetted legal forms. The process is fast and easy. All you have to do is fill out our easy-to-understand questionnaire. Once complete, simply download your form as a PDF or Word document from your secure online account.

What Information Will I Need to Create My Income Statement

To create your document, please provide:

• Name of Company: The legal name of the company.

• Period: The time frame the Income Statement covers.

• Total Revenue: Cumulative revenue from services, sales, and other sources.

• Revenue Deductions: These include price discounts, rebates, and refunds.

• Total Costs: Costs of services and goods sold and additional primary costs.

• Operating Expenses: Select all fields that apply.

• Non-operating Gains: These include gains from the sales of assets, legal action, interest revenue, and other gains.

• Non-operating Losses: Includes amortization and depreciation, legal operations, capital losses, interest expenses, and other losses.

• Discontinued Operations (optional): The value of the gain or loss.

• Profit or Loss from Extraordinary Items (optional): The weight of the gain or loss.

• Income Tax Value: The total income tax expenses.

Income Statement Terms

• Business Expenses: All company expenses incurred in the period.

• Continuing Operations Income: This is the difference in gains and losses after subtracting non-operating revenue, income taxes, and interest expenses.

• Operating Income: Earnings before taxes and interests.

• Revenue: Gross receipts for the period.

• Below-the-line items: Income that will not show up in future Income Statements. These are revenue from extraordinary items, discontinued activities, and the effects of accounting changes.

• Cost of Goods Sold (COGS): A company’s sales cost in providing its goods and services. It is the aggregate of direct costs (materials, parts, and labor) and other expenses.

• Other expenses: Including costs such as foreign exchange impacts, research and development, impairment charges, stock compensation, and other company-specific expenses.

• General and Administrative Expenses (G&A): The indirect costs of running the business. They include travel expenses, salaries and wages, insurance, office, and rent expenses. Amortization and depreciation are usually included in a separate section.

• EBITDA: Earnings Before Interests, Tax, Deprecation, and Amortization. This is not present in every income statement, which is most often cited by public companies when reporting earnings to shareholders.

• EBT: Earnings Before Tax is the operating income after interest expenses.

Income Statement Signing Requirements

Income statements typically do not need to be signed. Optionally, it can be signed by the company’s accountant.

What to Do with Your Income Statement

After reviewing the Income Statement, it should be kept in business records if classified as an internal document. An Income Statement can be sent to business partners and financial institutions if requested, but this is not required by law.

For a non-public company, the income statement does not need to be verified by any authority.