Читать книгу Entrepreneurial Finance - Robert D. Hisrich - Страница 39

The income statement describes the results of a company's operations over a specific interval of time. This interval could be a month, quarter, or year. The purpose of the income statement is to describe how much revenue was generated and what the associated level of expenses was. With these two pieces of information, we can determine whether the company is making a profit or not (see Table 3.2). The basic formula for the income (i.e., profit and loss) statement is simple:

A second use of the income statement is to provide the basis for calculating various measures of profit and cash flow. Various measurements of profit and cash flow include pretax net profit, net income (NI), and earnings before interest, taxes, depreciation, and amortization.

Pretax operating income is the primary measurement of the total earnings generated by the firm without regard to taxes and net interest income (expense). This measurement is an intermediate measure of firm performance that helps describe the firm's economic results over a period of time (see Table 3.2).

Table 3.2

Net income is the primary measurement of the after-tax total earnings of the firm. This measurement takes into account the firm's tax liability (see Table 3.2).

Earnings before interests, taxes, depreciation, and amortization (EBITDA) represent the profit generated after all expenses related to operations are paid. EBITDA is useful for comparison and valuation purposes as it paints a basic picture of the venture's operating capability as well as its ability to cover nonoperating payments such as taxes, interest payments, and principal (see Table 3.3).