What is Income Statement?
Financial Statements
Explained Simply
The income statement follows a simple formula: Revenue - Cost of Goods Sold = Gross Profit - Operating Expenses = Operating Profit - Tax = Net Profit. In South Africa, companies must prepare income statements in accordance with IFRS or IFRS for SMEs. Key metrics to track include gross profit margin, operating margin, and net profit margin. Accounter generates income statements automatically from your recorded transactions.
Related Terms
- Balance SheetA balance sheet is a financial statement that shows a business's assets, liabilities, and equity at a specific point in time, following the equation: Assets = Liabilities + Equity.
- Cash Flow StatementA cash flow statement is a financial report that tracks the actual movement of cash in and out of a business over a period, categorised into operating, investing, and financing activities.