Glossary: Income Statement

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Amortization of Intangible Assets: Balance Sheet-related account. Periodic (e.g., annual, monthly, etc.) reduction in Balance Sheet value of Intangible Assets (patents, purchased goodwill, etc.) owned by a business.

Cost of Goods Sold: Statement of Net Earnings account. The direct and indirect product costs associated with the Net Sales recognized in an accounting period.

Earnings Before Income Taxes: Statement of Net Earnings statistic. Net Earnings, plus Income Taxes.

Earnings Per Share: Finance statistic. Net Earnings, divided by Common Shares Outstanding (Fully Diluted).

Gross Margin: Statement of Net Earnings statistic. Net Sales, minus Cost of Goods Sold.

Gross Margin %: Statement of Net Earnings statistic. Gross Margin on Sales, divided by Net Sales.

Historical Interest Expense: Statement of Net Earnings account. Actual Total Interest Expense incurred by a business during an historical (vs. a forecast) accounting period.

Interest on Line of Credit: Statement of Net Earnings account. Interest expense on Line of Credit borrowings.

Interest on Subordinated Debt: Statement of Net Earnings account. Interest expense on Subordinated Debt.

Interest on Term Loan: Statement of Net Earnings account. Interest expense on Term Loan and Current Maturities outstanding.

Net Earnings: Statement of Net Earnings account. Net Sales recognized in an accounting period, minus all of the costs and expenses (including income taxes) incurred in the accounting period.

Net Sales: Statement of Net Earnings account. For accrual-based businesses, the dollar amount of revenue earned (net of allowance accounts) during an accounting period.

Operating Earnings: Statement of Net Earnings statistic. For businesses which have Cost of Goods Sold, Operating Earnings equal Gross Margin, minus Operating Expenses. For businesses which do not have Cost of Goods Sold, Operating Earnings equal Net Sales, minus Operating Expenses.

Operating Earnings %: Finance statistic. Operating Earnings, divided by Net Sales.

Operating Expenses: Statement of Net Earnings account. Costs and expenses (in addition to Cost of Goods Sold) recognized in an accounting period. Usually consists principally of administrative, sales and marketing expenses.

Other Income (Expense): Statement of Net Earnings account. Net amount of other income and expense items not elsewhere defined (e.g., gain on sale of assets, interest income, etc.).

Provision (Credit) for Income Tax: Statement of Net Earnings account. Federal and state income tax expense (credit).