07 May Single Step Income Statement
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A single step income statement presents a company’s revenues, expenses, and income in a simple form. The calculation involves a single step, hence the statement’s name. Total expenses are subtracted from total revenues to provide the company’s net income.
What is a Single Step Income Statement?
Small companies, sole proprietorships, and partnership firms often use a single step income statement to present their quarterly or annual financial performance. It is simple to prepare and does not involve any complicated calculations. In its most basic form, a single step income statement would contain only a few lines. It may list only the following data:
What does single step income statement mean?
- Revenues (A)
- Expenses (B)
- Net income (C)
Brady & Co., a machine tools manufacturer, presents its income statement in a single step format for the year 2017: Although this statement presents some basic information, it does not provide details about Brady & Co.’s gross profit and operating profit.
Example of single step income statement
A single step income statement is suitable for small organizations. It is easy to understand and prepare but provides very limited information.