For 80% of you, this is so basic that you just “rolled your eyes”. Completely understand. If one of my team asked me this, I would not be happy. I would be scared.
In a quick survey from my last post, looks like 1/3 of us don’t feel that confident with our accounting literacy. That’s okay, but let’s not make this an excuse. You gotta know and understand this stuff. It’s basic. . like knowing the difference between a strike and a foul ball in baseball. All business concepts are built on this foundation. Without a crystal clear sense of this, everything business thing you say has the potential to be shallow, unstructured, or wrong.
The income statement is about profits. Fundamentally, it helps you answer the question of “Did the company make money during this quarter?” It starts with revenue, then takes out costs, taxes, and other things to get you to net income (net profit).
Digging a little bit deeper, here…
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