An income statement is a financial report that summarizes a business’s revenue, expenses, and profit or loss over a specific period. It is one of the most commonly used financial statements because it helps business owners, managers, investors, and other stakeholders understand how the company performed financially. Related templates: free voucher templates.
An income statement template provides a ready-made format for organizing revenue and expense information. Instead of creating a financial statement from a blank document, you can use a template and enter the appropriate figures for your business and reporting period.
TemplatesDoc provides free income statement templates and examples in downloadable formats that can be customized for different business and accounting needs.
What Is an Income Statement?
An income statement, also known as a profit and loss statement (P&L) or statement of profit or loss, summarizes financial performance over a particular period.
A basic income statement may include:
- Sales or revenue
- Cost of goods sold
- Gross profit
- Operating expenses
- Operating income
- Other income or expenses
- Taxes
- Net income or net loss
The exact structure depends on the business and accounting method being used.
Free Income Statement Template
A free income statement template can make it easier to organize financial information in a consistent format. You can customize the reporting period, company name, revenue categories, expense categories, and other relevant sections.
Income statements may be prepared monthly, quarterly, annually, or for another period depending on the purpose of the report.
For internal management, monthly or quarterly statements can help track changes in revenue and expenses. Annual statements can provide a broader view of financial performance.
Income Statement Template in Excel
An income statement Excel template is particularly useful when calculations are required. Excel allows you to enter revenue and expense figures and use formulas to calculate subtotals, gross profit, operating income, and net income.
A simple structure might look like this:
| Category | Amount |
|---|---|
| Revenue | $100,000 |
| Cost of Goods Sold | $40,000 |
| Gross Profit | $60,000 |
| Operating Expenses | $35,000 |
| Net Income | $25,000 |
The actual categories and calculations should be adapted to the business’s accounting requirements.
Income Statement Template in Word
A Word income statement template can be useful when you need a clean, printable financial report. Word makes it easy to customize headings, company information, reporting dates, tables, and notes.
A Word template can be particularly convenient when the figures have already been calculated elsewhere and the primary requirement is presenting them in a professional format.
Single-Step vs. Multi-Step Income Statement
There are two common presentation approaches.
A single-step income statement uses a relatively simple calculation by grouping revenues and expenses and determining the resulting net income or loss.
A multi-step income statement provides more detail by separating areas such as gross profit, operating income, and other income or expenses.
The appropriate format depends on the business, reporting purpose, and applicable accounting requirements.
How to Prepare an Income Statement
Preparing an income statement generally involves several steps.
1. Select the reporting period: Decide whether the statement covers a month, quarter, year, or another period.
2. Calculate revenue: Gather the applicable sales and other revenue information.
3. Determine the cost of goods sold: For businesses that sell products, calculate the relevant cost associated with those sales.
4. Calculate gross profit: Subtract applicable cost of goods sold from revenue.
5. Record operating expenses: Include appropriate expenses such as salaries, rent, utilities, marketing, and administrative costs.
6. Calculate net income or loss: Account for the relevant income, expenses, and taxes according to the applicable accounting method.
7. Review the statement: Check figures, dates, formulas, and classifications before using or distributing the final report.
Why Is an Income Statement Important?
An income statement helps show whether a business generated a profit or loss during a particular period. Management can use it to identify changes in revenue and expenses and evaluate financial performance.
It can also help highlight areas where expenses are increasing or revenue is declining. Investors and other stakeholders may use financial statements as part of a broader evaluation of a company’s financial position and performance.
However, an income statement is only one financial statement. A complete financial analysis may also involve the balance sheet and cash flow statement.
Income Statement vs. Profit and Loss Statement
In many business contexts, income statement and profit and loss statement (P&L) refer to substantially the same type of financial report.
The terminology can vary by country, organization, accounting framework, or industry. Regardless of the name, the report generally focuses on revenues, expenses, and the resulting profit or loss for a defined period.
Download Free Income Statement Templates
Whether you need an income statement template, profit and loss statement template, P&L template, income statement Excel template, income statement Word template, or income statement example, a ready-made format can save time and provide a consistent structure.
Choose a template appropriate for your business, enter accurate financial information, and review the calculations carefully before relying on the completed statement for business or financial decisions.
5 Free Editable Income Statement Templates (Excel)
Download any of these original income statement templates for Excel. Each one includes working formulas for totals, gross profit and net income, so you only need to enter your own figures.
Single-Step Income Statement Template (Excel)
A one-page single-step income statement that totals all revenues and expenses to calculate net income, with automatic percent-of-revenue analysis for small businesses.
Multi-Step Income Statement Template (Excel)
A detailed multi-step income statement that calculates net sales, cost of goods sold, gross profit, operating income, income tax and net income, plus key margin ratios.
12-Month Income Statement Template (Excel)
A landscape 12-month profit and loss projection with monthly columns and fiscal-year totals, ideal for budgeting, forecasting and tracking monthly business performance.
Simple Small Business Profit and Loss Template (Excel)
An easy profit and loss statement for freelancers, sole proprietors and small shops, with income and expense lists, summary totals and automatic net profit.
Comparative Income Statement Template (Excel)
A year-over-year comparative income statement showing current and prior year figures side by side with dollar and percentage changes and margin analysis.
More Profit and Loss Statement Templates
Depending on the country and the organization, you may also see this report called a profit and loss account, a statement of financial performance or a statement of operations. Whatever the name, it is prepared for a set period so management can see how far the business has met its financial targets and where changes could improve results.
The templates below include budget comparisons, forecasts, projections and monthly, quarterly and annual layouts. Check every formula and figure before relying on a completed statement. This is general information, not accounting or financial advice.
Profit and Loss Statement with Budget Comparison (Excel)
A profit and loss statement that compares the current period with the prior period and the budget, showing each line as a share of sales and the change from prior period and budget.
Printable Profit and Loss Statement (PDF)
A simple fill-in form with sections for income, cost of goods sold and expenses, with totals for gross profit and net profit. Print it and complete it by hand.
Profit and Loss Statement Template (Word)
A Word profit and loss statement with a company name header, a period line and income and expense tables, ready to print once the figures are calculated.
Profit and Loss Statement Example (Excel)
A filled-in sample for a manufacturing company covering one quarter, showing net sales, cost of goods sold, gross profit, operating expenses and net profit. It is useful as a worked example; the sample figures are in rupees.
Profit and Loss Forecast Template (Excel)
A month-by-month forecast with rows for sales revenue, variable costs, gross profit and fixed costs such as rent, labor, utilities, insurance and advertising, ending in net profit or loss.
Annual Income Statement Template (Excel)
A one-column income statement for the year with revenue, cost of goods sold, gross profit and a list of operating expenses leading to net income.
Detailed Profit and Loss Statement with Ratios (Excel)
The newer .xlsx version of the budget comparison layout, using formatted Excel tables, with figures in thousands, prior period, budget and current period columns and automatic gross margin and return on sales.
Profit and Loss Projection Template (Excel)
A monthly profit and loss projection for a fiscal year. Enter your figures in the yellow input cells and it totals revenue, costs and profit.
Monthly Profit and Loss Tracker (Excel)
A January to December tracker with income by service, expenses, a tax rate input and automatic yearly totals for each row.
Quarterly Profit and Loss Template (Excel)
A quarterly statement with Q1 to Q4 and full-year columns, and each figure also shown as a share of sales.
Profit and Loss Account Template (Excel)
A monthly profit and loss account for an April to March financial year that calculates sales from quantity sold and unit price.
July to June Profit and Loss Template (Excel)
A monthly profit and loss for a July to June financial year with a yearly total column and a separate sheet explaining how to use it.
Current vs. Prior Period Income Statement (Excel)
An income statement that puts the current period next to the prior period with an increase (decrease) column, covering revenues, cost of goods sold, expenses and net income.
Frequently Asked Questions
1. What is an income statement?
An income statement is a financial report that summarizes a company’s revenue, expenses, and resulting profit or loss over a specific period.
2. Is an income statement the same as a profit and loss statement?
In most business contexts, yes. Income statement and profit and loss statement (P&L) are commonly used to describe a financial report showing revenue, expenses, and profit or loss.
3. What does an income statement include?
An income statement may include revenue, cost of goods sold, gross profit, operating expenses, other income or expenses, taxes, and net income or loss.
4. Can I create an income statement in Excel?
Yes. An income statement Excel template can be useful for calculating totals, subtotals, gross profit, operating income, and net income using spreadsheet formulas.
5. Can I create an income statement in Word?
Yes. A Word income statement template can be used to present financial information in a clean, professional, and printable format.
6. How often should an income statement be prepared?
Businesses may prepare income statements monthly, quarterly, annually, or for another reporting period depending on their accounting and management needs.
7. What is the difference between a single-step and multi-step income statement?
A single-step income statement uses a simpler presentation of revenues and expenses, while a multi-step statement provides more detail by separating items such as gross profit and operating income.
8. Is an income statement the same as a balance sheet?
No. An income statement reports financial performance over a period, while a balance sheet shows assets, liabilities, and equity at a specific point in time.
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