Income Statement Template

Updated on January 3, 2024
Article byWallstreetmojo Team
Edited byAshish Kumar Srivastav
Reviewed byDheeraj Vaidya, CFA, FRM

What Is An Income Statement Excel Template

An income statement excel template reports a company’s income and expenses and thus derives its profit generated for a specific period (generally for a financial year). It is the format of one of the three financial statements used to interpret an entity’s financial results.

Income Statement Template

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The excel template of an income statement is to be used for understanding how to calculate Net Profit from Gross Sales reported by a company. This Net Profit is important for all company’s reporting purposes, and this profit is used for further allocation of next year’s provisions and reserves and payment of dividends to shareholders.

Income Statement Template Explained

The success of an income statementIncome StatementThe income statement is one of the company's financial reports that summarizes all of the company's revenues and expenses over time in order to determine the company's profit or loss and measure its business activity over time based on user requirements.read more depends on accurately reported statistics. However, it also depends on the correct format the company uses to write the numbers. There are different income statement templates in excel approved by different financial reportingFinancial ReportingFinancial reporting is a systematic process of recording and representing a company’s financial data. The reports reflect a firm’s financial health and performance in a given period. Management, investors, shareholders, financiers, government, and regulatory agencies rely on financial reports for decision-making.read more institutions globally, and companies generally follow a particular institution (like US GAAP or IFRS for US entities or IAS for Indian companies). However, the same data can be reported interchangeably in other formats with the same output. Using the income statement excel template, one can derive the actual profit made by the company for the year and accordingly make decisions for future investments and provisions. Any update on the projected income statement excel template should be incorporated to create the next version of this template.

Video Explanation of Income Statement

 

Format

Given below is the format for the yearly or monthly income statement excel template.

  1. Gross Revenue: This is the earnings from the company’s Gross SalesGross SalesGross Sales, also called Top-Line Sales of a Company, refers to the total sales amount earned over a given period, excluding returns, allowances, rebates, & any other discount. read more. All expenses related to the sales are deducted after this starting point in the income statement.
  2. Cost of Goods Sold: All direct expenses in the manufacturing or development of a product are accounted for under this header.
  3. Gross Profit: Profit derived by deducting the Cost of Goods SoldCost Of Goods SoldThe Cost of Goods Sold (COGS) is the cumulative total of direct costs incurred for the goods or services sold, including direct expenses like raw material, direct labour cost and other direct costs. However, it excludes all the indirect expenses incurred by the company. read more from Gross Revenue;
  4. Operating Expenses: These operating expensesOperating ExpensesOperating expense (OPEX) is the cost incurred in the normal course of business and does not include expenses directly related to product manufacturing or service delivery. Therefore, they are readily available in the income statement and help to determine the net profit.read more relate to indirect costs of the company’s product, which is being sold and whose revenue is generated as a part of the Gross Revenue.
  5. Operating Profit: Income derived after deducting Cost of Goods Sold and Operating Expenses from Gross Revenue.
  6. Amortization Expenses: This is the average amount of any CapexCapexCapex or Capital Expenditure is the expense of the company's total purchases of assets during a given period determined by adding the net increase in factory, property, equipment, and depreciation expense during a fiscal year.read more carried out during the year based on the improvement’s useful life. E.g., replacing the roof of the property is a capital expense, and the company may not want it to be reflected in the same year. Moreover, the use of such improvement is being made over a period, which is also called the useful life of such a new roof. Hence such a huge amount is divided into the same smaller amounts, which can be reflected in the income statement yearly.
  7. Depreciation: Depreciation is an expense that is treated similarly to amortized. A fixed asset tends to deteriorate in value each year. Such a deteriorated amount is being accounted for in the income statement each year.
  8. Interest Expenses: Any interest expenseInterest ExpenseInterest expense is the amount of interest payable on any borrowings, such as loans, bonds, or other lines of credit, and the costs associated with it are shown on the income statement as interest expense.read more a company makes during the year for loans and advances.
  9. Tax: Commercial and industry-specific Taxes paid to the government (generally at 40%).
  10. Net Profit: This is the actual profit made by the company after all expense deductions.

The above format is is a standard one for any projected income statement excel template.

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Formula

Below is the calculation of each attribution of the income statement template in excel.

#1 – Gross Revenue (A):

  • Sales made by the company. It is the starting point of the income statement template.

#2 – Cost of Goods Sold (B):

#3 – Gross Profit (C):

  • Formula: (C) = Gross Revenue (A) – Cost of Goods Sold (B)

#4 – Operating Expenses (D):

  • All indirect expenses related to the product(s)’ manufacture/development. It may be allocated to more than one product sold by the company depending upon the proportion of usage.
  • Formula: (D) = Total Administrative Expenses (D1) + Total Selling Expenses (D2) + Other Indirect Expenses (D3)* Other Indirect Expenses can be elaborated further into sub-items depending upon items and reporting structure. These include Office Rent, Supervisor Salary, etc.

#5 – Net Operating Profit (E):

#6 – Earnings before Interest and Taxes or EBIT (F):

  • All Amortized and Depreciation expenses required to be reported by the company are deducted from Operating Profit (or EBITDA).
  • Formula: (F) = (E) – Amortized Expenses – Depreciation Expenses

#7 – Earnings before TaxesEarnings Before TaxesPretax income is a company's net earnings calculated after deducting all the expenses, including cash expenses like salary expense, interest expense, and non-cash expenses like depreciation and other charges from the total revenue generated before deducting the income tax expense.read more or Profit before Taxes or EBT (G):

#8 – Profit After Taxes or PATProfit After Taxes Or PATProfit After Tax is the revenue left after deducting the business expenses and tax liabilities. This profit is reflected in the Profit & Loss statement of the business.read more (H):

The amount derived after calculating PAT or Net Profit is used to allocate profits to reserves, dividend payouts, and other provisions for the following year. The above calculations show the yearly or monthly income statement excel template.

Example

Every business owner knows very well that it is important to keep track of business transactions so that the process is transparent and easily manageable. So, there are many websites that offer templates for making the income statement which makes the process easy. Some of them are freshbooks.com, wise.com, etc. They offer customised simple income statement template excel to review performance of business.

Relevance And Uses

You can download this Template here – Income Statement Excel Template.

Recommended Articles

This article is a guide to what is Income Statement Template. We explain it with its format, along with examples, various formula and uses. You can learn more about accounting from the following articles –

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