Top Notch Multistep Income Statement Example

Multi step income statement example worksheets offers your Excel worksheet extra adaptability.

Multistep income statement example. However the multi step income statement reveals that the business has a gross profit of 60000 which is fine but that operating expenses are 55000 giving only a small operating income of 5000 from its main trading activity. As an example a retailers multi-step income statement shall contain a figure for total sales of all goods made for this period and all expenses incurred while buying shipping or transportation and preparing the goods for sale will also be included in the costs of goods sold. The following example illustrates the format of a typical multi-step income statement.

The bank has requested that Bob must present the income statement in a multi-step format to get a better picture of his business. Section where the cost of sales is deducted from sales followed by income and expenses to reach an income before tax. The multi-step short for multiple-step income statement is the counterpart to the single-step income statement and is used by a business to report its earnings or losses for a reporting period.

A multi-step income statement reports much of the same general information included in a single-step income statement but it uses multiple equations to determine the net income or profit of the company. Therefore the Multi-step Income Statement is a preferred option for large-scale businesses and more detailed financial analysis. By Irfanullah Jan ACCA and last modified on Oct 24 2011.

Below is a very basic example of what a multi-step income statement may look like for a fictitious company called Example Corp In the above example the company has reported gross profit of 350000 and net income of 308000. It also shows the three equations that calculate net income. If you know the formula then you will not have problems.

In the example above the single step income statement shows that the business is making a net income of 25000 and all looks well. Compute Gross Profit Total sales Cost of goods sold Step 2. Chelseas Fine Boutique Income Statement.

Example of Multi-Step Income Statement. A Multi-Step Income Statement is a detailed statement reflecting profits or losses from the operating and non-operating activities of an organization for a specific reporting period. As you can see this multi step income statement template computes net income in three steps.