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Income Statement Analysis Formulas

This document provides a list of common formulas used for income statement analysis to determine a company's profitability. These formulas include gross profit, gross profit margin, operating income, operating profit margin, EBIT, EBIT margin, net income, net profit margin, earnings per share, price-to-earnings ratio, return on sales, return on assets, and return on equity. The formulas are used to analyze a company's revenue, costs, expenses, and profits.

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24 views1 page

Income Statement Analysis Formulas

This document provides a list of common formulas used for income statement analysis to determine a company's profitability. These formulas include gross profit, gross profit margin, operating income, operating profit margin, EBIT, EBIT margin, net income, net profit margin, earnings per share, price-to-earnings ratio, return on sales, return on assets, and return on equity. The formulas are used to analyze a company's revenue, costs, expenses, and profits.

Uploaded by

SLN
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd

Income statement analysis Quick Access Formulas

A type of financial analysis that involves analyzing a company's revenue and expenses to

determine its profitability. The following are some of the commonly used formulas for

income statement analysis:

1. Gross profit: Revenue - Cost of goods sold

2. Gross profit margin: (Gross profit / Revenue) * 100

3. Operating income: Gross profit - Operating expenses

4. Operating profit margin: (Operating income / Revenue) * 100

5. Earnings before interest and taxes (EBIT): Revenue - Cost of goods sold -

Operating expenses

6. EBIT margin: (EBIT / Revenue) * 100

7. Net income: Revenue - Cost of goods sold - Operating expenses - Interest expenses -

Tax expenses

8. Net profit margin: (Net income / Revenue) * 100

9. Earnings per share (EPS): Net income / Number of shares outstanding

10. Price-to-earnings ratio (P/E): Market price per share / Earnings per share

11. Return on sales (ROS): Net income / Revenue

12. Return on assets (ROA): Net income / Total assets

13. Return on equity (ROE): Net income / Total shareholder equity

Note that these formulas are not exhaustive and there may be other formulas used for income

statement analysis depending on the context and the specific financial indicators being

analyzed.

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