F4 Analysis of Income Statements
Comparison with statements from previous years can allow a firm to identify trends and make predictions. E.g. Is revenue increasing or decreasing?
Comparison with statements from rival firms can give an indication of performance compared to competition.
Performance ratios such as gross profit margin, net profit margin and ROCE can be calculated with data from the statement of financial position (these are covered in the next section)
| Income Statement for a Bike Shop for the year ended 31st December 2023 | ||
|---|---|---|
| £ | £ | |
| Sales Revenue | 70,000 | |
| Cost of Sales | 29,000 | |
| Gross profit | 41,000 | |
| Expenses | ||
| Rent | 9,000 | |
| Wages | 13,500 | |
| Insurance | 3,000 | |
| Marketing | 3,000 | 28,500 |
| Net profit | 12,500 | |
