Horti-Business Management (2+0)

Income Statement

• The income statement presents the results of the entity's operations during a period of time, such as one year. The simplest equation to describe income is:
Net Income = Revenue - Expenses

• Revenue refers to inflows from the delivery or manufacture of a product or from the rendering of a service. Expenses are outflows incurred to produce revenue.
• Income from operations can be separated from other forms of income. In this case, the income can be described by:
Net Income = (Revenue – Expenses) + (Gains – Losses)

• where gains refer to items such as capital gains, and losses refer to capital losses, losses from natural disasters, etc.