This section will provide you guidelines on how to prepare income statement of your business.
The statement templates provided, serve as a guide towards bare minimum line items that may be included in the financial statements. Please note that complete set of financial statements includes: income statement, balance sheet and cash flows along with explanatory notes. Further, you may seek professional guidance for preparation of formal financial statements, if deemed necessary.
Entries in this template that are marked in black indicate use of formulae. Please avoid tempering with formulae based entries.
Income Statement (Amount in Rs.)
A Sales This figure is obtained by multiplying number of units sold in a year with the net sales price of the product / service. Year 1 Year 2 Year 3 Year 4 Year 5
Cost of Goods Sold: This includes cost of raw material, labour, and factory overheads incurred during the production for the units sold. (This figure can be obtained by multiplying cost per unit with the total number of units sold during the year). In case of service based businesses, cost of delivering the services maybe included.
            Year 1 Year 2 Year 3 Year 4 Year 5
B Raw material The cost of raw material used in production of goods sold.          
C Wages The amount paid to direct labour employed by the business, e.g. production workers in case of a manufacturing concern.          
D Overheads The production cost other than direct material and direct labour.          
E Cost of Goods Sold (B+C+D) 0 0 0 0 0
F Gross Profit Profit earned from the difference between amount of sales and cost of goods sold. (A-E) 0 0 0 0 0
Expenditures: Selling, Admin and General expenditure.
G Salaries Paid to workers other than direct labour e.g. managers, accountant, salesman, peon.          
H Rent Rent of the factory or office building (If Any).          
I Utilities  Amount paid for indirect electricity, telephone, Gas, water bills other than used for production and accounted for in "D".          
J Insurance Amount paid as insurance of plant/machinery, office vehicles or any other business assets.          
K Advertising Any expenditure incurred for advertising and promotion of your business.          
L Depreciation  Amount of depreciation for the year, charged against fixed assets of the business.          
M Other Office Expenditure Office stationery, entertainment, janitorial services.          
N Others Any other expenditures related to your business.          
O Interest on Loan Interest paid on Short Term (working Capital) and Long Term Loan.          
P Sub - Total (G+H+I+J+K+L+M+N+O) 0 0 0 0 0
Q Operating Income Gross profit minus Expenditure. (F-P) 0 0 0 0 0
R Tax  Tax applicable according to the income of the business.          
S Net Income Operating Income - Tax Amount. (Q-R) 0 0 0 0 0