Free Income Statement Template

An income statement is an essential financial statement and the key value reported is Net Income. It summarizes a company's revenues and expenses and provides a picture of the financial performance over time.

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Income Statement This free spreadsheet template was designed for the small-business owner and contains two example income statements. The first is a simple single-step statement with all revenues and expenses lumped together. The second is a multi-step statement that calculates Gross Profit and Operating Income. "No Installation, No Macros - Just a simple spreadsheet"

Download Now Cost: $0.00 License: View Agreement File Type: .xls Size: ~35 KB Required: Microsoft Excel® 2002(XP), 2003, 2007, OpenOffice, or Google Docs

Income Statement Essentials

Net Income = Total Revenue - Total Expenses

Revenues: The income that is generated by providing a service, selling a product, earning interest on investments, renting extra office space, licensing technologies, selling advertising space, or licensing the use of your brand name. In the income statement template, there are categories for Sales revenue, Service revenue, Interest revenue, and Other revenue. You will likely want to customize the Revenue section to highlight your company's main sources of revenue.

Expenses: For a retail company, one of the main expenses is the cost of goods sold. For service businesses, this might not be such a large factor. Some of the other operating expenses may be advertising, salaries, rent, utilities, insurance, legal fees, accounting fees, supplies, taxes, etc.

There are many ways to format your income statement. The two examples that we provide above were meant mainly for small service-oriented businesses or retail companies. The simplified "single-step" income statement groups all of the revenues and expenses, except the income tax expense. The "multi-step" income statement example breaks out the Gross Profit and Operating Income as separate lines. It first calculates the Gross Profit by subtracting Cost of Goods Sold from Net Sales. It calculates the Operating Income and then adjusts for interest expense and income tax to give the Income from Continuing Operations.

Operating Income: In the multi-step income statement, the operating income is calculated as the Gross Profit minus the total Operating Expenses. In general, interest expense and income tax expense are not included as operating expenses, which gives rise to the term EBIT or "earnings before interest and taxes" - another name for Operating Income.

Income from Continuing Operations: This is the "bottom line", calculated as the Operating Income minus interest expense and income tax (and plus/minus non-operating revenues, expenses, gains, and losses, if there are any). If there are no "below-the-line" items, then this is the same as the Net Income.

Below-the-line Items: Some forms of income, such as the sale of a building you are no longer going to be using, are included "below-the-line" (i.e. below the reported Net Income from Continuing Operations) because they may not be expected to occur in the future. These include the effect of accounting changes, income from discontinued operations, and extraordinary items (gaines or losses that are unusual or highly abnormal).

For more information, see the references below.

References for Income Statement: