The income statement is a historical record of the trading of a business over a specific period (normally one year). It shows the profit or loss made by the business – which is the difference between the firm’s total income and its total costs. The income statement serves several important purposes:

What makes up the top line of an income statement?

Sometimes referred to as the “top line” – revenue shows the total value of sales made to customers The direct costs of generating the recorded revenues go into “cost of sales”. This would include the cost of raw materials, components, goods bought for resale and the direct labour costs of production.

How are sales recorded on the income statement?

The lines in the income statement can be briefly described as follows: The revenues (sales) during the period are recorded here. Sometimes referred to as the “top line” – revenue shows the total value of sales made to customers The direct costs of generating the recorded revenues go into “cost of sales”.

How is interest calculated on an income statement?

Interest paid on bank and other borrowings, less interest income received on cash balances, is shown here. A useful figure for shareholders to assess how much profit is being used up by the funding structure of the business. An estimate of the amount of corporation tax that is likely to be payable on the recorded profit before tax

How to create a business plan for tutoring?

Bryan will be able to make enough during the school year to sustain his needs when June July and august come around and students are fewer. The rent and expenses listed are for him to pay his rent and to eat etc. between group sessions. Need actual charts? We recommend using LivePlan as the easiest way to create graphs for your own business plan.

What makes a tutoring service a successful business?

Through personalized and focussed teaching processes, our students develop the tools they need for ongoing success in their fields of study. Our success depends on our attention to the needs of our clients and truly helping them achieve – we don’t succeed unless our clients succeed. This is a personal tutoring business.