Income Statement
Components of Income Statement:
1) REVENUE : Price x Quantity
2) COST OF GOOD SOLD : Direct costs involved in producing products.
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
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 +
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 +
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 :
11) NET PROFIT FROM CONTINUING ACTIVITIES :
PROFIT BEFORE TAX - INCOME TAX
12) NET PROFIT FROM DISCONTINUED ACTIVITIES : Gain/ Loss from
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
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
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