Yes, an income statement, otherwise known as a profit and loss (P&L), is a record that measures and shows all the revenues and expenses a company incurred during a specific period of time. The income statement helps determine a company’s financial health and the financial progress it made during a particular period. The income statement contains sections for revenue and expenses, which include net sales, gross profit, cost of goods sold, selling expenses, general and administrative expenses, and net profit.
A simple income statement template can help you create this financial document with information from your own company’s finances.
The income statement is used both internally and externally for different purposes. Internally, the income statement can be viewed at the corporate level, department level, product level or even customer level.
By evaluating the income statement at each level, the company can gain insightful understanding of how profitable a product, customer relationship or department is and adjust as needed.
The income statement is considered one of the most important financial statements due to the amount of information that can be pulled out of it. Externally, the income statement is used by investors, creditors, and stakeholders to understand how the company is making money and how they are allocating the revenue.
The income statement acts as the first impression to investors and creditors as a proof of business success or failure.
Using an income statement template offers several advantages for small businesses:
If you’re uncertain about financial reporting or have complex accounting needs, consulting with a qualified accountant or financial professional is recommended.
Here’s how to do an income statement in Excel:
Step 1: Download income statement Excel template.
Step 2: Determine the period of time for the income statement (monthly, quarterly, yearly).
Step 3: Export trial balance from accounting system for the specified period.
Step 4: Enter data into the income statement template.
Step 5: Calculate net income.
You can find more detailed instructions on how to use our income statement template when you download the template.
It’s recommended that businesses prepare and review monthly income statements to evaluate performance and make adjustments as needed to stay on track with financial budgets and goals.
The purpose of an income statement template is to provide a standardized format and structure for creating an income statement. It serves as a tool to organize and present the financial information related to a company’s revenues, expenses, and net income in a clear and consistent manner.
Here are the key components typically included in an income statement:
Yes, download our income statement Excel template. Then in Google Sheets, follow these steps: