Engineering Economic Analysis

The Income Statement

Income Statement for Engineered Industries for End of Year 2005

(all amounts in $1000)

Operating revenues and expenses

OperatingRevenues

Sales

(minus)Returns and allowances

Total operating revenues

Operatingexpenses

Cost of goods and services sold

Labor

Materials

Indirect Cost Allocation

Selling and promotion

Depreciation.

General and administrative

Lease payments

Total operating expense

Total operating income

Nonoperating revenues and expenses

Rents

Interest receipts

Interest payments

Total Nonoperating income

Net income before taxes

Income taxes

Net profit (loss) for Year 2005

28,900

-870

28,030

6140

4640

2280

930

1850

900

510

17,250

10,780

400

180

-120

460

11,240

3930

7310

FIGURE 18-3 Sample income statement.

statement are non-operatingexpenses such as interest payments on debt in the form of loans

or bonds...

From the data in Figure 18-3, Engineered Industries has total expenses (operating =

$17,250,000 and nonoperating = $120,000) of $17,370,000. Total revenues are

$28,610,000 (= $28,030,000 + $400,000 + $180,000). The net after-tax profit for year

2005 shown in Figure 18-3 as $7,310,000, but it can also be calculated using Equation 18-5

as:

Net profits (Loss)=Revenues - Expenses [before taxes]

$11,240,000=28,610,000 - 17,370,000 [before taxes] and with

$3,930,000taxespaid

thus

$7,310,000=11,240,000 - 3,930,000 [after taxes]

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