Income statements

It starts with sa\es

Most people know that the revenue. 'This is the money
term "bottom line" me~ns "
. ortant thing.
"the most imp . se\hng go . . deducted
But ifs also an accounting
It refers to the
term. . come
bottom line of an in
statement. An income
t is also called a
statemen • f't
P & L. That means pro I
and loss." A P & L
statement shows a ,;
summary of a company s
financial transactions over
a period of time.
a company gets from t
. ods 'The cos
of those goods is
from the revenue. Next
the genera\ and
administrative expenses
are deducted. Finally,
taxes are subtracted.
The numb
er that remains
. II d
Income Statement
the bottom line is ea e.
on 'Th. amount 1s
t. come. is
ne in n';S bottom line.
the compa Y

Get Ready!
0 Before you read the passage,
talk about these questions.
1 What information goes on
income statements?
2 How do companies use income
statements?

Reading Vocabulary
f) Read the income statement E) Match the words (1-5) with the definitions (A-E).
and magazine article. Then,
mark the following statements 1 _ gross margin 4 _ P&L
as true (T) or false (F). 2 _ sales revenue 5 _ general and administrative expenses
1 _ "Bottom line" means net 3 _taxes
income.
A a statement showing financial information for a certain period
2 _ Operating margin minus taxes
B money that is paid to a government
is gross margin.
C the costs associated with organizing and running a business
3 _ P & L statements show
information from a period of D an amount that is calculated by subtracting cost of goods sold
time. E the money that is received from selling goods or services
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