Financial Report-Income Statement

Income Statement

Components of Income Statement:

  1) REVENUE : Price x Quantity
  2) COST OF GOOD SOLD : Direct costs involved in producing  products.   

       Examples are materials, direct labour, factory overhead such as electricity 

       bill and depreciation of machines.
  3) GROSS PROFIT : REVENUE - COST OF GOOD SOLD
  4) OTHER OPERATING PROFIT : Other incomes from direct sales of

      products such as sales of electricity and rental fees from unused spaces

      from building used for operation.

  5) OPERATING EXPENSE :  Indirect expense incurred other than direct cost 

       such as general & administrative expenses, sales & distribution expenses,  

       promotion expenses, research expenses.
  6) OPERATING PROFIT :  GROSS PROFIT +

      OTHER OPERATING PROFIT - OPERATING EXPENSE

  7) FINANCIAL PROFIT (also called Non-Operating Profit) : Profit that are 

      generated from non-operating activities. Examples are interest received, 

      gain from selling securities.

  8) FINANCIAL EXPENSE (also called Non-Operating Expense) : Expense that

       are not included in operating activities. Examples are interest paid, lost from

       selling securities.
  9) PROFIT BEFORE TAX (PBT) : OPERATING PROFIT +

      FINANCIAL PROFIT - FINANCIAL EXPENSE

  10) INCOME TAX : Tax paid to government based on profit before tax (or more

        accurate taxable income)
  11) NET PROFIT FROM CONTINUING ACTIVITIES : 

        PROFIT BEFORE TAX - INCOME TAX
  12) NET PROFIT FROM DISCONTINUED ACTIVITIES : Gain/ Loss from 

        liquidating one of the sectors of the company
  13) OTHER COMPREHENSIVE INCOMES : Mainly consist of three factors 

        that not added into the profit. Examples are Gain/ Loss from foreign 

        currency, gain/loss from hedging, unrealised gain of available-for-sales 

        securities.

  14) TOTAL COMPREHENSIVE INCOMES : NET PROFIT +

         OTHER COMPREHENSIVE INCOMES