Income statement template.

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income-statement-template

What is an income statement?

An income statement sets out your company income versus expenses, to help calculate profit. You’ll sometimes see income statements called a profit and loss statement (P&L), statement of operations, or statement of earnings.

Income statements can be created to analyze and compare business performance over a month, a quarter or a year, and are an effective tool to review cash flow and predict future business performance.

Smart business owners use income statements alongside other key financial documents, like the balance sheet and cash flow statement, to check up on and improve the health of their businesses.

Download an income statement template.

Basic income statement

Basic income statement

Download your free simple income statement in Excel. Customize and plug in your business numbers, to make analyzing your company performance easy.

Income statement template Excel download →

Traditional income statement

Traditional income statement

This single step income statement is perfect for small businesses and sole proprietorships. Get your free template here, add your branding and create a tailor-made financial statement for your business.

Single-step income statement template download →

See an example of a income statement

Multi-step income statement

Multi-step income statement

Use the free template to create your multiple step income statement in Excel, and get an in depth report of your net business profit or loss.

Multi-step income statement template download →

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Income statement format.

Revenue
Revenue, also called sales or business income, includes money received for the sale of the company’s goods or services.
Expenses
Expenses, commonly referred to as operating expenses, are costs the company incurs related to sales. These might include the cost of goods for resale, property rental, and the price of consumables like printer ink and stamps.
Profit/loss
You can calculate your business profit or loss by subtracting the expenses incurred from your revenue. If the number is positive, you have a net profit. If it’s negative, your business has made a loss in that period.
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Income statement formula.

The single step income statement formula is:
Total Revenues - Total Expenses = Net Income

An income statement compares company revenue against expenses to determine the net income of the business.

Subtract operating expenses from business income to see your net profit or loss. If revenues are higher than total business expenses, you’re making a profit. If your business expenses over the period being examined were higher than your income, the company has made a loss.

This calculation is useful for business owners and investors as it shows the net profitability of a business, and how efficient a company is at generating net income.

Income statements give a snapshot view of business performance - create a monthly, quarterly or annual statement, which you can analyze and compare to performance over the same period in previous years.

How to create the profit and loss statement template?

Choose the time period.
Choose the time period used to generate the income statement - this could be a month, a quarter or a year, for example.
Add revenue and expenses.
Input your business income and expenditure numbers.
Add or remove line items as necessary.
Make sure the income statement fits your business by adding and removing line items as you go. Add a line where needed, or you can also easily delete lines from the template as required.
Double check the formulas.
Confirm that the formulas are working as intended.

FAQ

Both the income statement and balance sheet are important financial statements - but each has a different function for business owners and investors.

A balance sheet gives a point in time view of a company's assets and liabilities, while the income statement details income and expenses over an extended period of time (usually one year). A balance sheet helps determine a company's current financial situation and make important financial decisions. The income statement can be run at any time of the fiscal year to determine profitability and compare one period of time to another to show growth.

An income statement shows a company’s income versus expenses over a given period. It shows whether the company is making profit or is in loss, by subtracting total expenses from total income.

When you build your income statement you’ll need to customize the line items to suit your business. Here are some of the expenses to think about:

  • Cost of Goods Sold (COGS) - the price you pay your suppliers for raw materials, and direct labour, for example.

  • Selling, General and Administrative Expenses (SG&A) - this covers a wide range of items including business property rental, transportation, employee salaries, business rates and more.

  • Depreciation and amortization - known as non-cash expenses, depreciation reflects the cost of capital assets spread over time, while amortization is about the loss of value of intangible assets, like a patent for example.

  • Research & Development (R&D)- depending on your business type, you may need to add in any extra costs incurred for researching and developing new products you plan to launch.

A multiple step income statement is a more complex income statement which splits out different types of revenue and expense, allowing detailed analysis of the business. Operating revenues and expenses are segregated from nonoperating income and costs, for example. This document will also generate a gross profit figure for your business.

A contribution margin income statement is used to generate contribution margin, as well as overall net profit.

The company revenue is added to the statement, with fixed and variable expenses being split out, which allows this income statement format to show contribution margin alongside net business income.

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