The English-Chinese Dictionary of Securities Investment by the Commercial Press explains that the income statement is expressed as the income statement in American English. Abbreviation: Yes. British English is the income statement. The financial records of the company's operating performance in a period of time reflect the sales revenue, sales cost, operating expenses and tax payment during that period. The result of the report is the profit realized or the loss formed by the company. See the income statement. The other is: business statements; ; Income statement; Operating statement
In the process of drafting the income statement standards, it is found that most countries and regions have no separate income statement standards, which affects the mutual comparison of accounting information to some extent. When drafting the income statement standards in China, based on the principle of drawing lessons from international practices and conforming to China's national conditions, and according to the requirements of macro-management and the needs of all parties for enterprise operating results indicators, a unified income statement standard was formulated.
China's enterprise accounting standards-income statement is divided into three parts: introduction, text and supplementary provisions. Among them, the introduction explains the scope of the standard, that is, the information that should be provided to standardize the profit statement submitted by enterprises. The text is divided into five paragraphs: definition, basic requirements, report items, report structure and report notes. In the definition part, the concept of 19 is given, and the items in the profit and loss are defined, which lays the foundation for the preparation of the profit and loss statement, and also provides the basis for us to understand the standards and use them correctly. The basic requirements stipulate the requirements of time, currency unit, indicating the name of the enterprise, accounting period for calculating profit and loss, report number and preparation of comparative income statement. The report first States that "the income statement is classified according to operating gross profit, operating net profit, total profit, net profit and distributable profit, and lists the composition and profit distribution of total enterprise profit and after-tax net profit." Then the contents of operating income and operating cost are defined in detail, and the profit calculation program is described. The format of the income statement is usually multi-step. The report notes explain what should be included in the report notes. The annex explains the ownership of the right to interpret this standard, the handling method in case of conflict with other laws and regulations and the effective date. Comparison of editing this paragraph Since most countries do not have separate income statement standards, the following only compares China Accounting Standards for Business Enterprises-Income Statement (draft for comment) and International Accounting StandardsNo. 1 Presentation of Financial Statements (revised in 1997) with the income statements of some countries.
(a) the scope and classification of operating income
China's current system stipulates that operating income is divided into main business income and subsidiary business income. With the development of economy, the business scope of enterprises is diversified, including industry, commerce, tourism, real estate and so on. And it is no longer clear which is the main business and which is the subsidiary business. The income of some subsidiary businesses has even exceeded the main business. Therefore, China's specific guidelines (draft for comment) no longer divide operating income into main business income and subsidiary business income.
Opinion No.30 of the American Accounting Principles Board (APB), "Report on Operating Results", lists income, expenses, profit and loss of normal items, profit from continuing operations, profit and loss of discontinued operations, profit and loss of extraordinary items, cumulative impact of changes in accounting principles, net income and other items. In the format, operating income is only listed as "income", but when reporting income, sales income and other income can be combined into one item, or interest income, rental income and investment income can be listed separately. It can be seen that the United States only regulates income statement items from a large category. However, the standards of China's income statement items are more stringent. International accounting standards are divided into "income" and "other operating income" to list operating income.
② About expenses.
International accounting standards stipulate that "an enterprise should analyze expenses in the income statement or the notes to the income statement and classify them according to the nature or function of internal income and expenses." At present, there are two main cost analysis methods: the first is called cost nature method (or "expenditure nature method"). According to its nature (for example, discount, raw material purchase cost, transportation cost, wages and salaries, advertising cost), expenses are reflected in the income statement as a total amount and are not redistributed among different functional units within the enterprise. This method is only used in many smaller companies, and there is no need to share operating expenses among various functional departments. The second analysis is called the functional classification of expenses and expenses or the "cost of sales" method, which divides expenses into cost of sales, sales or management expenses according to their functions. Compared with classifying expenses by nature, this method can usually provide users with more relevant information, but allocating expenses to functional departments may be arbitrary and require a lot of judgment. Under this analysis method, expenses are divided into sales expenses, management expenses and other operating expenses. The choice of sales cost method or expenditure nature method depends on historical and industrial factors and the nature of enterprise organization. Both methods can provide information about which costs may change directly or indirectly with the sales or production level of enterprises. Because each presentation method classifies the components of operating performance of different types of enterprises, the method is selected. However, because the information about the nature of expenses is helpful to predict the future cash flow, additional disclosure is needed when using the sales cost method.
In China, the cost analysis adopts the sales cost method, and the expenses are strictly divided into management expenses, financial expenses and sales expenses. The United States is not as strict as China, but it often lists sales expenses together with general management expenses, while depreciation expenses, interest expenses and exchange gains and losses are listed separately, and some also list net interest income separately. Articles 275 to 278 of the German Commercial Code make special provisions on the income statement, including: the format and items of the income statement. German accountants can use the total cost method or the sales cost method to calculate the profit and loss according to the commercial code. German accountants can use the total cost method or the sales cost method to calculate the profit and loss according to the commercial code. The total cost method of profit and loss calculation is to report the production performance based on the production scale performance (including net sales, inventory increase and decrease, self-made equipment and other performance) minus the total cost (including material cost, labor cost, discount and others). This classification method requires cost accounting according to the economic nature of expenses. As for whether the product is sold or not, it will not affect the total performance. The sales cost method of profit and loss calculation is to subtract the sales cost from the net sales according to the sales scale to report the production performance. No matter how much is produced, unrealized sales will go up in smoke. The requirement of this method for cost accounting is to carry out cost center accounting according to the economic use of expenses, and the sales cost only includes production cost, sales cost and management cost.
③ About profit
The total profit in China's specific accounting standards (draft for comment) consists of operating net profit, net investment income, non-operating income, non-operating expenditure and extraordinary net loss.
For operating net profit, the operating net profit range of China is smaller than that of the United States. If most of the investment income belongs to the operating profit of the United States, according to the structure of China's income statement, the investment income is actually non-operating profit, which is not in line with the business or business scope. By analogy, investment is not a normal business activity, although it goes against common sense. Operating profit in Germany also includes investment income. China directly lists investment income, while Germany lists it as participation income, other marketable securities and long-term loan income, other interest income, long-term financial assets and amortization of short-term securities according to its composition. The income statement stipulated by the US Securities and Exchange Commission (SEC) also lists the investment income by item, including dividends, securities interest and securities income.
For non-operational income and expenditure, China's regulations are not consistent with those of the United States. The United States divides profits and losses into extraordinary items and normal items. On the basis of division, the United States judges from the nature of economic business. Our country is divided from the economy of business itself, so one of our non-operating income and expenditure items may be part of the operating profit of the United States, such as the net income from the sale of fixed assets; While China's non-operating expenses are corresponding, it is extremely unlikely that Germany will be divided into extraordinary items. Corresponding to China's non-operating expenditure, Germany is divided into extraordinary income, extraordinary expenses and extraordinary net profit. By definition, both countries define non-operating (extraordinary) income (income) and expenses as income and expenses unrelated to normal business activities, but they have different understandings of what is "normal" and what is "extraordinary". Dealing with fixed assets and foreign donations is regarded as an "extraordinary" matter in China, but it is regarded as a "normal" business in Germany.
In Germany, the exact definition of accounting profit is annual profit, that is, the balance after income MINUS expenses. Its accounting income tax is collected before the annual profit, that is, the after-tax annual profit. If you don't distinguish carefully, taxable income and annual profit are naturally different. The total profit of China is the profit before income tax. Income tax in the United States is a calculation item of operating profit, and its net profit can be regarded as all distributable profits.
The income statement of the United States is divided into commercial statements and non-commercial statements. The business report mentioned the 30th opinion of APB, namely "profit from going concern". In the multi-step presentation of "going concern profit", gross profit, operating profit, pre-tax profit and after-tax operating profit should be calculated respectively. The non-operating part of the report is divided into profit and loss from termination of operation, profit and loss from extraordinary items and cumulative impact of changes in accounting principles. The profit and loss of business closure refers to the sale, abandonment or loss of ownership of some businesses of an enterprise. "Part of the business" refers to the business that constitutes an independent and main part of the whole enterprise business or has a class of customers, such as the radio station of a communication company. Diversified enterprises are the only independent branches. Report users usually predict the future by understanding the development trend of enterprises. Therefore, financial statements in different periods must be comparable. When the operating results of the current year in the financial statements include those terminated businesses that have nothing to do with the future, if these results are not clearly distinguished, the comparability of the statements will be greatly weakened. From the perspective of "objectivity and fairness", it may be necessary to include the business achievements obtained during the suspension period in the data of the current year, but in order to improve the comparability of information, this part of the performance should be distinguished from the continuous performance. With the in-depth development of China's economy, the activities of business suspension and acquisition will increase rapidly, and the suspension of goods operation should also be presented in China's income statement. Each item in the table should distinguish between going concern and stopping concern. They can be listed in the income statement in the form of columns or reflected in the notes to the report. Similarly, the part of enterprise business obtained this year can be disclosed separately, which can also improve the comparability of information.
In 1973, the 20th opinion of the American Accounting Principles Board (APB), "Accounting Changes", requires that the cumulative impact of changes in accounting principles (including changes in accounting principles, changes in accounting estimates and changes in reporting entities) should be reported in the income statement, and the amount should be net after deducting income tax. In order to ensure the comparability of accounting information, the net income of previous years should be adjusted off-balance sheet according to the new accounting standards on the basis of assumptions. The impact of changes in accounting estimates does not need to be reflected separately, nor does it need to adjust net income; The change of accounting entity needs to adjust the income statement of previous years. International accounting standards require enterprises to reflect the following three items as separate components of their financial statements: (1) current net profit and loss; (2) According to the requirements of international accounting standards, various income and expenses, gain or loss items directly included in equity (for example, revaluation of surplus and loss and some foreign exchange translation differences), and the total amount of these items; (3) Cumulative impact of accounting policy changes and major corrections, major errors and accounting policy changes handled according to the benchmark treatment method of International Accounting Standard No.8-Current Net Profit and Loss. However, China's specific accounting standards (draft for comment) only take the change of accounting principles and its impact as an off-balance sheet explanation and do not enter the income statement.
In this case, the enterprise may find errors in the accounting statements of the previous period or the previous period in this period. Such errors can be divided into two categories: one is the adjustment that does not affect the calculation of profit and loss and does not involve income tax payment or tax refund; The other is the adjustment that affects the profit and loss. When it is discovered, it is necessary to adjust the profit and loss and pay or refund the income tax. For the former problems, they can be adjusted according to the requirements of relevant laws and regulations after being discovered, without affecting the preparation of the income statement; The latter question must be reflected in the adjusted income statement. In China's specific accounting standards (exposure draft), in order to link up with historical habits and simplify accounting, it is not required to prepare a complete profit and loss statement for the previous year's profit and loss adjustments found in this period, but only to reflect the amount that affects the current profit and loss in a separate item between total profit and income tax. The basic financial statements in the United States include balance sheet, income statement, retained income statement and cash flow statement. The United States lists the prior period adjustments in the retained income statement.
There are two ways to disclose the profit distribution items: one is to prepare the profit distribution table separately from the income statement; The second is to list it in the income statement. In China's accounting system, the profit distribution statement is compiled separately as a statement of the income statement. Judging from the actual implementation, this processing method has brought some inconvenience to the report users. In the specific accounting standards (exposure draft), in order to reflect the profit and profit distribution of enterprises more comprehensively and intuitively, the content of profit distribution is reflected in the income statement. The United States uses the retained earnings statement to reflect the distribution of profits.
(iv) Statement
China's specific accounting standards (draft for comments) stipulate that the following related contents should be explained in the notes to the income statement: (1) changes in relevant accounting policies; (2) Supplementary explanation of specific items in the income statement; (3) Contents or operating conditions that are difficult to reflect in the format of the income statement; (4) Changes and impacts due to changes in accounting methods during the reporting period; (5) A statement that the profit distribution plan has not been approved. In international accounting standards, enterprises are required to present the following three items in financial statements or notes: (1) capital transactions with owners and distribution to owners; (2) Cumulative profit and loss balances at the beginning and balance sheet date and current changes. (3) The adjustment between all kinds of equity capital and capital premium and the book amount of each reserve at the beginning and end of the period, as well as the changes between the beginning and end of each project shall be disclosed separately.
⑤ About the format of the report
At present, there are two main formats of profit and loss statements in the world: multi-step income statement and single-step income statement. Because of the multi-step profit and loss formula, pay attention to the hierarchy of income and expense ratio, which is convenient to analyze the production and operation of enterprises, is beneficial to compare different enterprises, and more importantly, the multi-step profit and loss statement is helpful to predict the future profitability of enterprises. Therefore, China's Accounting Standards for Business Enterprises-Income Statement (Draft for Comment) adopts the multi-step income statement format. Edit this paragraph to make a profit and loss statement. At the end of the fiscal year, all accounts must be balanced. The balance of all accounts should be put in the trial balance. Accountants need to make income statement and balance sheet according to the information in bookkeeping. In addition to these two financial statements, some companies also make cash flow statements and statements of changes in shareholders' equity. The company will first calculate the company's net sales and the cost of goods sold, and then calculate the gross profit/loss after getting the figures of these two items. Net income/loss can be calculated by subtracting the sum of income and expenditure. There are several important formulas:
Method for calculating gross profit/loss:
Gross profit = net sales)-Cost of goods sold.
Net sales = sales)-sales returns and discounts.
Cost of Goods Sold = Opening Inventory)+Purchase (Purchase Return and Discount)+Freight (Delivery/Transportation Expenses)-Ending Inventory.
Calculation method of net profit:
Net profit = gross profit+total income (revenue)-total expenses (expenditure) The accounting information reflected in the income statement can be used to evaluate the operating efficiency and operating results of enterprises, evaluate the value and return of investment, and then measure the success of enterprise management. Specifically, it has the following functions:
1, the income statement can be used as the basis for the distribution of operating results. The income statement reflects the operating income, operating costs, operating expenses, business taxes, expenses of each period and non-operating income and expenditure in a certain period of time, and finally calculates the comprehensive profit index. The data in the income statement directly affects the interests of many related groups, such as national tax revenue, bonuses of managers, wages and other remuneration of employees, dividends of shareholders, etc. It is precisely because of this role that the income statement once surpassed the balance sheet and became the most important financial statement.
2. The income statement can comprehensively reflect all aspects of production and business activities, which is helpful to evaluate the work performance of enterprise managers. The management efficiency and benefit of enterprises in production, operation, investment, fund-raising and other activities can be comprehensively manifested from the increase and decrease of profit. By comparing the income, cost and profit with the production and operation plan of the enterprise, we can evaluate the completion of the production and operation plan, and then evaluate the operating performance and efficiency of the enterprise management authorities every year.
3. The income statement can be used to analyze the profitability of an enterprise and predict its future cash flow. The income statement reveals the detailed information of operating profit, net investment income and net non-operating income and expenditure, which can be used to analyze and evaluate the profitability of enterprises. At the same time, various expected cash sources, amount, time and uncertain factors, such as dividends or interest, proceeds from the sale of securities and repayment of loans, are closely related to the profitability of enterprises. Therefore, income level plays an important role in forecasting future cash flow. Edit the style of the income statement in this paragraph: XX Co., Ltd. 20 XX Year Unit: RMB.
Project Current Period Amount Previous Period Amount
I. Operating income
Minus: How is the operating cost calculated here?
Business tax and surcharges
selling cost
How is the management fee calculated here?
financial expenses
asset impairment loss
Plus: gains from changes in fair value (losses are indicated by "-")
Investment income (losses are filled with "-")
Among them: investment income of joint ventures and associated enterprises.
Two. Operating profit (loss is filled with "-")
Plus: Non-operating income
Less: non-operating expenses
In which: disposal loss of non-current assets
Three, the total profit (total loss to "? 6? No. 1 ")
Less: income tax expenses
Four, net profit (net loss to "? 6? No. 1 ")
Verb (abbreviation for verb) earnings per share:
(1) Basic earnings per share
② Diluted earnings per share
Income statement-analysis of investment income indicators
Investment income analysis includes:
1, net income per share of common stock. The net income per share of common stock is the ratio of this year's surplus to the number of common stock in circulation. Its calculation formula is generally net income per ordinary share = (net profit-preferred stock dividend)/weighted average number of ordinary shares issued. Because there is no provision on issuing preferred shares in China Company Law, the net income per share of common stock is equal to the net profit divided by the total number of shares issued. This index reflects the profit level of common stock. The higher the index value, the more profits can be obtained per share, and the better the investment benefit of shareholders. On the contrary, the worse the situation.
2. Dividend payment ratio. The dividend payout ratio is the percentage of dividend per share to net income per share of common stock. Its calculation formula is dividend payout ratio = (dividend per share/net income per share) * 100%. This indicator reflects the income of ordinary shareholders from the total net income per share. As far as individual ordinary investors are concerned, this index reflects the current interests more directly than the net income per share. The dividend payout ratio depends on the specific situation of each company's demand for funds. The dividend payment rate depends on the company's dividend payment policy, and the company should consider the capital demand, financial risk and optimal capital structure for business expansion to determine the dividend payment rate.
3. Price-earnings ratio. The definition of (1) price-earnings ratio. Price-earnings ratio is the ratio of price per share to earnings per share, also known as price-earnings ratio or price-earnings ratio or price-earnings ratio. Its calculation formula is the ratio of market price to earnings per share = price per share/earnings per share. The price per share in the formula refers to the buying and selling price of common stock in the securities market. (2) Price-earnings ratio analysis. This index is an important index to measure the profitability of joint-stock enterprises. Compared with the stock price, earnings per share reflects the price that investors are willing to pay for each yuan of profit. The higher the ratio, the greater the potential for future growth of the company. Generally speaking, the higher the P/E ratio, the higher the public's evaluation of the stock. However, it should be noted that when the earnings per share are small or loss, the P/E ratio is often very high, and the P/E ratio at this time does not explain any problems; When the P/E ratio is greatly influenced by net profit and there is profit manipulation, this index will lose its meaning.
4. Return on investment. The return on investment is equal to the ratio of the company's investment income to the average investment. Expressed by the formula: return on investment = return on investment/(long at the beginning, short-term investment+long at the end, short-term investment) /2 * 100%. This index reflects the profitability of the company's long-term and short-term investment with funds.
5. Dividend payout ratio The dividend payout ratio is the percentage of dividend per share and earnings per share. The calculation formula is: dividend payout ratio = (dividend per share/earnings per share). This ratio reflects how much shareholders get from all earnings per share. As far as ordinary investors are concerned, this reflects the current interests more directly than earnings per share.
6. Net assets per share Net assets per share is the ratio of net assets to total share capital at the end of the period, also known as book value per share or equity per share. The calculation formula is net assets per share = year-end shareholders' equity/total share capital. Investors should also pay special attention to another important indicator-adjusted net assets per share. Adjusted net assets per share = (year-end shareholders' equity-accounts receivable for more than three years-deferred expenses-net loss of assets to be processed (current and fixed)-start-up expenses-long-term deferred expenses)/total share capital at the end of the year Generally speaking, the adjusted net assets per share are slightly lower than the net assets per share, but if the adjusted net assets per share are far lower than the net assets per share, it means that the company's assets are of poor quality and potential losses are huge, which may occur at any time. (5) The P/B ratio relates the net assets per share to the stock price per share, which can explain the market's evaluation of the company's asset quality. The price-to-book ratio is the ratio reflecting the relationship between the price of each share and the net assets per share. The calculation formula is P/B ratio = price per share/net assets per share. Net assets per share is the book value of the stock, calculated at cost. The price of each stock market is the present value of these assets and the result of securities market transactions. Generally speaking, the higher the market price is than its book value, the better the company's asset quality and the higher the price-to-book ratio of high-quality stocks.