How Do I Prepare a Startup Profit and Loss Statement or Income Statement?
Posted by Pierre de la Fortune on August 22, 2015 @ 12:01 a.m.
Written by Jean Murray
Answer: Preparing a Year-end Pro Forma Income (Profit and Loss) Statement Most of the information for this statement comes from your first year monthly budget (cash flow statement), and from estimated calculations on depreciation from your tax adviser. For each row, you will have a quarterly amount then a total for the year.
First, show your business net income (usually titled "Sales") for each quarter of the year. You can break down the income into sub-sections to show income from different sources, if you wish.
Then, itemize your business expenses for each quarter. Show each expense as a percentage of Sales. All expenses should total to 100% of Sales. Then show the difference between Sales and Expenses as Earnings. This is sometimes called EBITDA (earnings before interest, taxes, depreciation, amortization). Then show total interest on your business debt for the year and subtract from EBITDA. Next list taxes on net income (usually estimated) and subtract. Finally, show total depreciation and amortization for the year and subtract. The number you have now is net earnings.
For more info please visit: http://biztaxlaw.about.com/od/businessplan/f/income-statement.htm
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