Business of Radiology 101
Income Statement
EQN: Revenues - Expenses = Net Income (aka Profits or Losses) An income statement demonstrates a business’ loss or gain of money over a defined accounting period. A period is typically defined as monthly, quarterly, or yearly, but can be weekly or shorter. The goal of the income statement is to show how amounts collected as revenues are transformed into the 'Net Income'. This is achieved by the removal of a series of expenses which account for a variety of direct and indirect costs incurred in producing the products or services that generates the revenues. These expenses can include: Cost of Sales, Operating Expenses, Non-Operating Expenses, Depreciation, Amortization, and Tax. The 'bottom line' of an income statement is the Net income indicating the monetary gain or loss of the business over a time period.
The income statement differs from the other basic financial statements - balance sheet and cash flow statement - in a variety of ways. A balance sheet summarizes the company's overall value and obligations at a point in time by itemizing the components of the following equation: Assets = Liabilities + Equity. A cash flow statement compares the inflows and outflows of cash during an accounting period. These balance sheet and cash flow statement will be the focus of future interactive tutorials.