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Financial Statements

Financial Statements. Income Statement. Income Statement. Show the business’s revenues and expenses incurred over a period of time and the resulting profit or loss. Can help you:. Examine how sales, expenses, and income are changing over time

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Financial Statements

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  1. Financial Statements Income Statement

  2. Income Statement Show the business’s revenues and expenses incurred over a period of time and the resulting profit or loss

  3. Can help you: • Examine how sales, expenses, and income are changing over time • Forecast how ell your business can expect to perform in the future • Analyze your costs to determine where you may need to cut back • Identify categories of expenditures you may want to increase or decrease

  4. Consists of these parts: • Revenue • The dollar value of the goods or services a business sells to customers • Cost of Goods Sold (COGS) • The cost of inventory a business sells • Gross Profit • Difference between revenue and COGS • Operating Expenses • Expenses necessary to operate a business • Net Income Before Taxes • Income before taxes remaining after COGS and operating costs are subtracted • Taxes • Net Income/Loss After Taxes

  5. Income Statement Activity In pairs you are going to prepare an income statement with the given cards

  6. Income Statement Activity • Using excel prepare an estimated income statement for your own company • Estimate your revenue & COGS • Use your monthly fixed costs to serve as your operating expenses • You will need to X’s 12 months • Use a 40% tax rate • When done print out and turn into the bin

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