Income Statement Format

Description	Period 1	Period 2	Period 3	…
Revenues
– Sales
– Other Revenue
Total Revenue

Cost of Goods Sold (COGS)
Gross Profit

Operating Expenses
– Selling, General and Administrative
– Research and Development
– Depreciation and Amortization
Total Operating Expenses

Operating Income

Other Income/Expenses
– Interest Income
– Interest Expense
Total Other Income/Expenses

Pre-Tax Income
– Income Taxes
Net Income

Consistency: Helps in comparing financial performance over multiple periods.
Clarity: Makes it easier for investors, management, and stakeholders to understand the financial condition.
Standardization: Helps in comparing the financial statements of different companies.
Compliance: Required by accounting standards for public reporting.
Ease of Analysis: Helps in quick decision-making processes for managers and analysts.

Not All-Inclusive: Doesn’t capture non-financial factors like brand reputation, employee satisfaction, etc.
Historical Data: Mostly based on past performances and may not necessarily predict future conditions.
Accounting Methods: Different accounting approaches can yield different results.
Complexity: Some line items like deferred tax liabilities or derivatives can be complex to understand.
Short-Term Focus: Encourages short-term performance at the cost of long-term sustainability.

All topics to explore on Income Statement: