How Do You Do A Multi-Step Income Statement?
“An income statement is one of the financial statements required by GAAP. It measures earning performance of a company over time. Now, the major categories that you’ll find on an income statement include revenue and its major components, cost of goods sold and its major components and then the resulting difference is the gross margin. Now, frequently a company has other income and other expenses that are directly related to the primary sale of its products, so that will follow gross margin and the other income and expense section. The next sub-total then will be income, operating income or income before interest and taxes. Some companies also may do this, they actually include their interest in the other expense and then the sub-total will be operating income before taxes.
