Income Statement

1
Income Statement

• Revenues - Expenses Net Income
• Period of Time
• Accrual Accounting
• Matching of Revenues to Expenses
• Now for the rest of the Story
• Footnotes to Statements

2
Organization of Income Statement

• Operations versus Disposition of profits
• Operating Profit is paid out to
• Creditors (interest)
• Government (taxes)
• Shareholders (Dividends Ret. Earnings)

3
Income Statement
1998
1997
Sales
5,834,400
3,432,000
COGS
5,728,000
2,864,000
Other expenses
680,000
340,000
Deprec.
116,960
18,900
Tot. op. costs
6,524,960
3,222,900
EBIT
(690,560)
209,100
Interest exp.
176,000
62,500
EBT
(866,560)
146,600
Taxes (40)
(346,624)
58,640
(519,936)
Net income
87,960
4
Other Data
1998
1997
No. of shares
100,000
100,000
EPS
(5.199)
0.88
DPS
0.110
0.22
Stock price
2.25
8.50
Lease pmts
40,000
40,000
5
Statement of Retained Earnings (1998)
Balance of retained earnings, 12/31/97 203,768
Add Net income, 1998 (519,936) Less
Dividends paid (11,000) Balance of retained
earnings, 12/31/98 (327,168)
6
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