ShmoopTube

00:03

what is an income statement I made money yeah that's an income statement and it's [Man jumping up as money rains down]

00:11

actually not all that far off from what accountants lawyers bankers and other

00:14

forms of humans who count beans call an income statement well cleverly named an

00:19

income statement is a statement of income it just states how you made your [Two guys stood at a food stall]

00:24

income your french fries smoothie stand like who would have ever thought that

00:29

would taste good sold a million units at five bucks each to give you five million

00:35

dollars in revenue last year well you had some cost that went with

00:39

those sales though you had to buy cups the french fries and other unnamed [Costs of french fries smoothie stand]

00:44

ingredients and you had to pay 2 some ones to stand there and convince people

00:48

to drink liquefied potatoes then you had to rent space for your stand and buy

00:53

insurance and advertise and that abnoxious mascot in the potato costume

00:58

you had five million in revenue and three million in expenses and this [revenue of french fries smoothie stand]

01:03

number right here that's your pre-tax or operating profit

01:07

you then take away your 30% in taxes which on two million dollars is 600

01:13

grand and blammo that 1.4 million is your net income or [net income figure for business]

01:18

after-tax profit this whole thing right here is your income statement and yeah [income statement for french fries smoothie business]

01:24

it can and does get way way more complex than this but let's start with starch

01:29

smoothies and work our way up [man at french fry stand thinking about selling sushi shakes]

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