Total sales are usually the first number on your income statement to tally up. It shows the stability and growth of your company over time. The income statement is also vital when you are applying for a loan for your business. Also, many companies create an income statement to look for recurring patterns in their expenses and profit. Many federal regulatory agencies require you to prepare your income statement for tax purpose. You can calculate your income statement monthly, quarterly or yearly to ascertain the company financial health. This comparison helps your company evaluate and make decisions regarding expenses, revenue and how to increase profit. The primary benefit of keeping an income statement is so that comparison can be made. The profit and loss statement is also known as the income statement, and it is used to calculate a company’s profit by weighing its income and expenditure.
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