Lesson Wrap-up
The structure of an income statement is standard, but it can vary with each industry. You can expect to see operation-related revenue and expense first and then unusual or irregular items at the end of the page. The basic formula for the income statement is: revenue less expense = net income (i.e., profit or loss).
Managers and business owners review income statements to determine whether they are operating at a profit or loss. Financial managers often review these statements with other reports because income statements offer only a certain perspective of the business and not the entire picture.
