Introduction to the Income Statement

The income statement, revenue, gross profit, operating profit, net income, ROA and ROE.

Category:

Education

Tags:

• finance
• income
• statement
• ROA
• ROE
• gross
• profit
• revenue

[khanacademy]

That is one of the definitions. The standard formula takes out the effect of interest and tax savings from interest and is (net income + interest - tax savings from interest)/Assets which is essentially saying how much earnings would I have if I weren't paying debt. If you wanted a pre-tax ROA than you could just add back interest and taxes and divide by Assets (or EBIT/Assets which is, for the purposes of this examples, the same as Op profit/Assets

[anzwertree]

Dude, you rock

[carlbostic]

Thanks Sal. You did a much better job at helping me build a foundation than my instructor.

[Ren1026cbcc]

@iNinjaNotes Thanks for explaining. :)

[iNinjaNotes]

@Ren1026cbcc Sales are NOT taxed. Only pre tax income is taxed, which should be one of your last numbers on your income statement before calculating tax. All of those expenses like cost of goods sold, interest expense, marketing expenses reduces your taxable income. If you were to tax sales @ 30% it would be $900,000 of tax. This wouldn't make any sense right? Because the cost of all the goods you produced is $1,000,000.

Always make sure that the numbers make sense!

[JediFight]

Great slow explanation.  Thank you. Very nice to have information like this available.

[ebutuoy76]

Income Statement/Balance Sheet/Cash Flow Statement/G&A/SG&A/Cost of Goods Sold/Marketing/Sales/Gross Profit/Operating Profit/Enterprise Value/Return on Asset/ROA/Pre-tax Income/Net Income/Depreciation/Amortizati­on/Return on Equity/ROE/Variable Cost/Fixed Cost/Sales People/Auditor/plain vanilla/jumble up/nuance/detract/

[flany1960]

Thank you for this video and I wish you health and wellness, as well as you can get discounts for organic products International DXN number : 1420-31106 or join my group

[Ren1026cbcc]

Why is it that only the last $500,000 is taxed? Wouldn't the sales ($3,000,000) be taxed? Please let me know what I am missing.

[mehwhatupdok]

this has really helped my university exam for accoutning. have no fucking idea what a "widget" is ...but it helped! :D Thanks bud!

[keeperofthecheese]

the fucks a widget?

Other than that, top stuff.

[wag1blad]

nigger u gay

[mizzprinks]

I am a medical student and recently an MBA student to learn about finance. This is the first time I actually wanna learn finance after starting the course, because it was simply so boring to a medical student like me and made absolutely no sense. Now it does, THANKYOU! GOnna watch the rest of your economics videos::)