Analysing Income Statement
Earlier, a brief explanation of financial statements was provided, which consisted of three statements. In this unit, we will start off with the first one, i.e., income statements.
How to Analyse the Income Statement of a Company?
The Income statement is a financial document that measures a company's financial performance over a specific accounting period. Financial performance is assessed by giving a revenue and expenses breakup through both operating and non-operating activities.
The income statement is a document of importance to managers, investors and other stakeholders alike as it contains vital information about the company. The income statement denotes whether a company has incurred profits or losses over a given time period
The different components of an Income Statement are: -
- Revenue
- Other Income
- Expenses
- Net Profit
We will dive through each of these components of income statements in the subsequent units.
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A sample Income statement of Company XYZ:
