The income statement is one of the four financial statements
presented by a company to its shareholders, the SEC, and the
public on a quarterly, semi-annual, or annual basis. It shows
how revenue is reduced to net income according to generally
accepted accounting principles through the subtraction of
various expenses. - The cost of raw materials. - The cost of
manufacture. - Shipping and handling costs to receive raw
materials or to deliver finished goods, depending on the terms
of such orders. Next, various operating expenses are subtracted
from gross profit to arrive at operating profit, sometimes
called EBIT (earnings before interest and taxes). These expenses
are sometimes called overhead or SARE. These include: - Research
and development - Depreciation and amortization - Selling,
general, and administrative costs. These include: - Selling
expenses such as commissions to sales people. - Overhead, such
as utility expenses. - Various salaries, such as those for
management Finally, various non-operating inco