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Income Statement

Autor:   •  May 24, 2012  •  Essay  •  606 Words (3 Pages)  •  1,345 Views

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The income statement will show the following elements which give the financial result of the year; revenues, expenses such as operating expenses and financial expenses, cost of goods sold, earnings such as gross profit, operating profit and net profit.

Revenues or sales are the first figure you should research when doing income statement analysis.

COGS is the expense directly related to producing (how much is the cost for the company to produce the good or service) or purchasing (how much is the cost for the company to purchase the good or service) the goods or services sold by the company.

Operational expenses includes all the other expenses related with the company's business, like marketing costs, salaries, research and development costs, and other.

In the segment of analysing financial costs, interests and taxes are crucial components.

Financial ratio for income statement

Gross Margin

Gross Profit ÷ Net Sales

2010 2011

Gross margin-0.398 gross margin-0.382

Indicates the percentage of sales dollars available for expenses and profit after the cost of merchandise is deducted from sales. The gross margin varies between industries and often varies between companies within the same industry.

Profit Margin (after tax)

Net Income after Tax ÷ Net Sales

2010 2011

Profit margin-0.523

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