Sample income statements

Writing a Business Plan

Sample income statements

- The components of an income statement for a business plan

Introduction
Business is all about figures. Financial projections form the core of any business plan. Income statement is first of the three financial statements of a business plan. Income statement can be defined as a financial statement that measures the profitability of a business. Also known as the Profit and Loss Statement or the Operating Statement.

Your financial statements will reflect your proper business planning and would give the reader an idea as to how and when would you start earning money, break-even and then become profitable. Financial statements and projections should follow Generally Accepted Accounting Standards (GAAP) and should include properly prepared income statements, cash flow statements, and balance sheets.

Financial Projections are usually depicted for a period of 3 - 5 years for the future forecast and 3 years (or since inception if business has been running less than 3 years) in historical data. An income statement for a business plan should be broken out by month the first year. The second year can be broken down quarterly, and annually for each year after.

Sample Income Statements
We are providing information on Sample Income Statements so that you have the basic understanding of the major components. To say the least, financial projections of a business plan should be prepared by financial experts and our company can help you finalize your income statements.

A Sample income statement records revenue, expenses, capital, and cost of goods.

An income statement begins with "Revenue" or "Gross Sales". As we move down the statement cost of goods sold is subtracted from "Revenue" to reach "Gross Income". Then "Total Expenses" (Supplies Expenses, Bank fee and Interest, Depreciation, General and Office Expenses, Management Salaries, Rent and Utilities, Wages and Benefits, Other Expenses) are subtracted from Gross Income to reach "Net Profit before Tax". Then the "Tax" is subtracted from "Net Profit before Tax" to reach your "Net Profit".

Sample Income Statements can also be prepared with help of several financial software products available in the market. But it is advisable not to use those sample income statements but to get them prepared by a financial expert. But if you prefer to use sample income statements available on the net or self generated you should get them reviewed by your accountant at a minimum.

Although some people find great comparison in an income statement and a cash flow statement but the difference is that an income statement does not include details of when revenue was collected or expenses paid.