Income Statement
Income Statement
Cost: Cost is a monetary measurement of the amount of resources used for some
purpose.
Cost of sales: The cost of goods or services sold is called the cost of sales. The
cost of sales is the accumulated total of all costs used to create a product or
service, which has been sold.
Depreciation expense: The portion of the cost of a fixed asset that is recorded
as an expense each year of its useful life.
Earnings per share (EPS): is a company's net profit divided by the number of
common shares it has outstanding. EPS indicates how much money a company
makes for each share of its stock, and is a widely used metric to estimate
corporate value.
Gross margin (or) Gross Profit: The difference between net sales revenue and
cost of sales is the gross margin (or gross profit).
Matching Concept: Using the matching concept of accounting, the Incomes
and expenses are matched together and profit or loss will be determined.
The debit side of the profit and loss account shows the expenses and the credit
side the incomes. If the total of the credit side is more, it will result in net
profit. Moreover, if the debit side is more, it will result in net loss.
Net sales: Sales revenue less sales returns and allowances and less sales
discounts.
Non-operating activities: Various revenues, expenses, gains, and losses that are
unrelated to a company’s main line of operations.
Net profit: also known as Net Income or Net earnings. It is the result after all
expenses have been subtracted from revenues. This figure is the aggregate result
of all operating and financing activities of an organization. As such, it is
routinely relied upon by investors, creditors, and lenders to make decisions
about how to deal with a firm. Net profit is also called the bottom line, because
it is positioned at the bottom of the income statement.
Sales: The total amount charged customers for merchandise sold, including cash
sales and sales on account.