流利说商务英语 Level 6 Unit 1 Part 1(三)Income Statement
Income Statement
An income statement shows changes in a business's revenues and expenses over a certain time period.
Items included in an income statement are revenue, cost of goods sold, gross profit, expenses, and net profit.
Revenue
Revenue is the income that a business receives.
Revenue is usually generated from the sale of goods and services. A company's performance is measured based on how its revenue compares with its expenses.
cost of goods sold
Cost of goods sold (COGS) is the cost that comes from the production of goods. This includes the cost of materials and direct labor costs used to produce the goods. For a bakery, the money spent on buying flour is considered as cost of goods sold. The newspaper industry has struggled in recent years to boost its revenue.
Cost of goods sold includes the cost of materials and direct labor costs and excludes distribution costs and other indirect expenses.
The mobile industry's revenue is projected to reach over 1 trillion dollars in 2020. Cost of goods sold includes material costs and labor.
gross profit
Gross profit is the total profit made after deducting the cost of goods sold from sales. A company can increase its gross profit by increasing sales while maintaining or reducing cost of goods sold.
expenses
Expenses represent the amount of money a business spends besides the cost of goods sold.
Common business expenses include employee wages, payment to suppliers, and office leases.
Businesses try to cut expenses in order to increase their net profit.
Net profit is the profit a company makes after subtracting expenses from its gross profit.
Companies can determine if they are successful or not by looking at their net profit. Our gross profit for the quarter amounted to7 million dollars. A start-up company may need to borrow a large sum of money to pay for its expenses. Annual net profit dropped 15% due to increased expenses.
Although the company's gross profit is high,its net profit is low due to large expenses.A company's total costs are equal to the cost of goods sold plus expenses.
