Free income statement

Review your business performance

Looking to improve your business? Review your company profitability today with a simple income statement. Spot growth opportunities, cut costs, and build a better business. 

What is an income statement?

An income statement is a key financial document used by business owners and investors to analyse and improve performance. Income statements are also referred to as profit and loss statements, P&Ls, or statements of earnings. Whatever you call it, your income statement is used to show your business income versus expenses – and help calculate profitability.

Creating an income statement for your business allows you to review performance over time, and spot opportunities to cut costs and boost profits. Use your income statement alongside your Wise for business account to save time and money when connecting with suppliers and customers abroad.

Download your free income statement template, and get started today.

How to prepare an income statement?

1. Choose the time period & gather the figures you’ll need

Decide what period of time you’ll use for your report - this is typically a month, quarter or year. Then, open up your sales and expense records so you’ll have easy access to your data.

2. Add sales or revenue information

Using your chosen income statement template, complete the first section, detailing your revenue. Don’t forget, you can add or remove lines from the income statement sample to fit your business needs.

3. Enter expense information

Depending on the type of income statement you’re producing, this may require you to split out the cost of goods sold and operating expenses.

4. Calculate gross profit and operating profit

For a multi-step income statement, you can now calculate operating profit and gross margin. In a simple income statement, you can skip this step.

5. Add income before tax, and then tax information

You can now calculate your income before tax, and create a new line for the taxes you’ve paid.

6. Complete net profit or loss - the bottom line

You now have all the information required to finish the example income statement, and calculate your net profits.

Choose and download an income statement template

Basic income statement

Customize this basic income statement to create the perfect document for your business. Enter your business details, and use Excel to calculate your profit information.

Traditional income statement

Download this traditional income statement for your small business, to spot growth opportunities and boost profit. Plug in your details, and let Excel do the math.

Multi step income statement

Get this multi-step income statement to dig deeper into your company performance. Break down your results to show gross profit and operating profit, as well as your overall sales, expenses, and net earnings.

How to fill in the income statement sample

Download the basic income statement sample in Excel, and gather your sales and expense information. You’ll then need to take the following steps:

1. Add revenue

Review the revenue lines in the template, and complete the details for your business. Add or remove lines as you need, to make the income statement reflect your business perfectly.

2. Enter expenses

You can now add in line by line expense information, covering the cost of goods sold and operating expenses for your business. You can also complete your tax information.

3. Calculate net profit

Using the detail you’ve entered, calculate the net earnings for your business over the time period you’ve chosen. You can compare profit over time, using the same method for different time periods, to analyze and improve performance.

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Income statement formula

Income statements can provide rich insight into any business. However, the primary aim of any income statement is to show net profit over the time period. Here’s the basic income statement calculation:

Total Revenues – Total Expenses = Net Income

If your total revenues are higher than your total expenses, your business has made a profit. If your expenses were higher than your income, you’ve made a loss.

Income statements are most useful as a tool for comparing performance over time. You can see how your  business performance changes from month to month, and predict future profitability based on your data. 

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Income statement - FAQs

1. What does an income statement show?

An income statement shows business income compared against business expenses. This allows business owners, investors and analysts to see the company’s profit or loss over the reporting period.

2. What time period does an income statement cover?

When you create your income statement you can choose the time period you want to reflect. Businesses usually produce income statements to cover a month, quarter or year. By creating regular income statements it’s possible to track and review performance over time.

3. Balance sheet vs income statement

Both the balance sheet and income statement are key financial documents for your business. However, they show different things. The income statement shows revenues coming into the business, and expenses flowing out of the business. The balance sheet on the other hand shows what a business owns, versus what it owes.

4. Multi step vs single step income statement which is better?

There are different types of income statements, which can be chosen according to your needs. A simple income statement gives key information about business income, expenses and net profits. This can be a smart way to review crucial business data on a regular basis. A multi-step income statement goes into more detail, showing gross and operating profit. This may be more useful for a more established business, as an annual review, or when presenting financial information to investors.

5. What are the 3 sections of an income statement?

The 3 sections of any income statement are revenue, expenses, and net profit/loss

6. How does the income statement link to the balance sheet?

Both the income statement and balance sheet are important documents. The income statement shows the profitability of a business over a time period. The balance sheet shows the value of the business. By looking at both together, investors and analysts get a rounded picture of business performance.