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Professional eBook

What are Income Statements?

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(13 ratings)
Language:  English
This eBook you will give you a thorough understanding of the income statement and why it is such a powerful decision-making tool.
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This eBook you will give you a thorough understanding of how an income statement is prepared and the important information this can give you. This knowledge is something every manager should be familiar with.

It is a powerful decision-making tool that enables you to measure an organizations financial performance even if the organizations are different sizes. This information is then used to compare it against expectations to assess how well it is being managed.

This eBook you will give you a thorough understanding of the income statement, a powerful decision-making tool that every manager should be familiar with.

You will learn:

  • How an income statement is prepared and what it can tell you
  • The importance of transaction timing and how it influences the income statement totals
  • How to use accounting standards to help you define operating and non-operating expenses
  • How to use income statements to measure financial performance against expectations
  • How to compare income statements for different sized organizations
  1. Purpose of the Income Statement
  2. Income Statement Formats
    1. The Single-Step Format
    2. Multiple-Step Income Statement
    3. Importance of Transaction Timing
    4. Other Operating Expenses
    5. Other Generic Terms
  3. Using Income Statements Effectively
    1. Income Statements in Comparative Formats
    2. Performing a Common-Size Analysis
  4. Comparison with Cash Flow Statements
  5. Summary
  6. References
About the Author

Paul Newton

Paul Newton has worked in IT and Project management for over 30 years and has also developed several internet based enterprises. He was a co-founder and director of ITT Ltd where he was responsible for the development and marketing of software-based management training tools. Clients included Microsoft, IBM, Pfizer, Sun Microsystems, UK National Health, Ministry of Defence, Barclays and many other internationally known organisations.

Prior to that, he worked as an IT consultant specialising in developing IBM mainframe software for many of the company's clients including: Rockwell, Severn Trent Water, SWEB, SWALEC, and Eagle Star Insurance.

He also owns, a leading provider of practice aptitude tests. This website helps over a million people per year to pass job selection tests including: numerical, verbal, abstract, spatial and mechanical reasoning tests. It has 16 free practice tests available to download - visit

You can contact him at, or via his personal blog