Operating Income Statements

Financial statements are prepared to provide information about a company’s assets, revenues, expenses and liabilities. Operating income statements are part of the income statements.

Types of Financial Statements:
Basically, there are four types of financial statements. They are:
Balance sheet
Income statements
Statement of retained earnings
Cash flow statements

Operating income statements are statements, which provide detailed information about a company’s expenses incurred, for carrying out operational activities. The operating income statements reflects the operating results for a particular period. It may be for a month, few months or a year. Income statements, also known as Profit and Loss statements are worked out to find out how much a company has actually earned.

It shows the top line as well as the bottom line. The top line is referred to as the total revenue earned by a company, when the expenses have still not been deducted. On the other hand, a bottom line is the revenue earned after the associated expenses have been deducted . This is the actual income of the company.

Elements of Operating Income Statement:
Operating income statements records and project the following operational activities:
Net revenue: includes settlement of liabilities, additional procurements of assets, services rendered during a specific period. The net revenue earned from these activities is mentioned in the operating income statements.
Expenditure: utilization of assets, fiscal outflow for cost incurred on major operational activities of the company are also highlighted in the operating income statements.
G & A or General and administrative expenditure: expenses incurred on insurance, stationery, professional fees, legal fees, salary of officers, utilities, depreciation are all taken into account under this section.
Cost of goods sold: is the cost involved in producing a particular product.
Expenses for research and development: is the cost involved in carrying out research and development activities.
Depreciation: is the cost of a depreciated asset of the company.
Selling expense: is the cost involved in selling products of the company. In other words, it is the cost involved in working out and implementing marketing strategies.

More Information Related to Financial Report
Financial Report Basics Balance Sheet Income Statement Cash Flow statement
Organisational Financial Report Financial statement Financial Statement Assertions User of Financial Statement
Annual Financial Report Financial Status Report Monthly Financial Report Stock Financial Report

Last Updated on : 26th June 2013

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