7.4.1.1. Income Statement
An income statement is a document that summarizes a company’s sales, expenses, and profits over a given period of time. The income statement starts with sales, also called revenues, which is the total amount of money taken in by the company, then subtracts the company’s various expenses, in a particular order, to arrive at the company’s profits.
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Income Statement for Northwest Coffee, Inc. (in millions) |
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Millions of Dollars |
Margin |
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Sales/Revenues |
100.3 |
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COGS |
(55.7) |
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Gross Profit |
44.6 |
44.5% |
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Operating Expenses |
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SG&A |
(20.4) |
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Research and Development |
(2.4) |
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Depreciation and Amortization |
(1.3) |
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Total Operating Expenses |
(24.1) |
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Operating Income (EBIT) |
20.5 |
20.4% |
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Interest Expense |
(2.0) |
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|
EBT |
18.5 |
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Taxes (35%) |
(6.5) |
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Net Income (Net Earnings) |
12.0 |
12.0% |
Cost of goods sold (COGS) is the first expense to be subtracted from sales. COGS is the cost of pro