Income statement or also known of profit and loss statement is a report used to give a summary of the organization or company's financial performance over a certain period, it shows company net income or net loss. The purpose of Income statement is to show both external and internal stakeholders and investors where is the company current position, whether it is making profit or losing money during that period.
Income statement can be reported monthly, quarterly, or annually. Monthly income statement will show all the income and expenses for that month, while annual income statement will show all the income and expenses for the year.
Income statement is one of basic financial statements aside from the balance sheet and cash flow statement. An income statement can be prepared using spreadsheet like Google sheet or Microsoft Excel. Those are the most popular program to manage data with calculations.
Prepare The Data
An income statement requires cash flow data within a certain period. We need to prepare the data about the company's revenue and expense during that period of time. Revenues are the amount of money earned through the sale of goods or services. While expenses are cost of goods and other expenses.
Microsoft Excel comes with pre-formatted template to help us create an income statement with no hassle. To use this, we need to go to File menu -> New, in the New panel we use search box to find income statement template using keyword like "income statement".
Select A Template
There will not be much pre-formatted templates when it comes to income statement, you can choose one of pre-formatted template provided by the search result. Highlight the template to preview and click on the download button to start editing.
Edit the Header
The header section should be clear and easy to understand. We need to edit it with company's name and information, the title of the income statement, and the time period.
Create the Statement’s Body
We can start by filling out the revenue and expense data to the income statement's body. An income statement's body is usually divided into four main parts; one section is for revenue, operating expenses, other income, and the last one is for cost of goods.
We can insert extra rows if the the rows provided to each sections are not enough. Excel's income statement templates come with built-in calculation formula to calculate total expenses and net incomes, the number will appear as soon as we are entering value to the fields.
That's all, we can save the income statement on our local drive. Don't forget to double-check for input errors or misspelling.
Below are some examples of income statement templates that can be used as references for creating your own income statement. Enjoy and be inspired