monthly expenses and income template free downloadables

The higher the gross profits, the better is the business as it has more cushion to meet other expenditures and save money. Normally, the gross profit is divided by the revenue called gross profit margin and compared with the previous periods and competitors to check how efficient is the supply chain and the processes of a business.

Business managers uses this thing to measure the operating efficiency of a business. Is simply the difference between the revenue and cost of goods sold. It is directly proportionate to the revenue and for the purpose also called “variable cost” and as the sales increases the cost of goods sold increases in specific proportionate (i.e., the more burgers sold means an equally more buns, meat, cheese etc. In our example of restaurant, the cost of goods include money spent on purchase of buns, meat, cheese, beverages, etc. It is normally the second line in the income statement and the basic purpose of separating this cost from other expenditures is to show clear picture on how much the business is spending on merchandise sold. is the Revenue of “ABC Restaurant”.Īlso referred to as “direct cost” is the cost incurred by a business to produce goods or services. In our example of restaurant business, the income generated from the sales of burgers, sandwiches, fries, cold drinks, etc. The revenue is the first line on the income statement of a business. Is the income generate through sales of products/services and it is the primary source of income. Let’s explain in easy words with examples. To further understand the income statement, the reader must know the following general accounting terminologies. The simple format of income statement is re-produced below for my favorite restaurant business. Technically, the income statement is coherent and logically presentation of income and expenses of a business. The simple formula for calculating the income statement is to subtract all the expenditures from the income. The income statement can be prepared for any period including monthly, quarterly, half yearly or annually. In other words, this statement tells story about how much the business has earned over a specific period. The income statement tells story about the operations of a business and indicates how profitable a business has been over a certain period. Some businesses call it income statement in the common, while others call it the “Income and Expenditure Account”. So, the income statement is basically a statement that tells the story about the organization income and expenditure. The explains the Statement as a sentence that tells the reader a fact or idea about a single topic. METHOD OF PREPARATION OF INCOME STATEMENT.COMMONLY HEAD OF ACCOUNTS IN INCOME STATEMENT.After reading this article, you should be apple to learn:

Monthly expenses and income template free downloadables