Intro to Business › Section N · Financial information and accounting › Topic N.4

The income statement

Did the business make money, and where did the money go? The income statement answers both questions for a period of time, layer by layer, from the top line of sales to the bottom line of net income.

In this topic

  • A film of the period
  • From gross sales to net sales
  • Cost of goods sold
  • Gross profit and operating expenses
  • Down to the bottom line
  • Worked example: Kestrel's top half
  • Worked example: Kestrel's bottom half
  • Two layouts, one answer
  • Profit is not cash
  • Common mistakes to avoid
  • Key takeaways

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