What is multi step income statement?

[alenaghose]

Pls explain.

 

[niyati]

A multi-step income statement is a type of financial report that separates operating and non-operating elements and provides a detailed breakdown of a company's sales, expenses, and net income. By computing important indicators like gross profit and operating income, it offers a more detailed picture of a company's financial performance than a single-step income statement.

 

[deepak]

A multi-step income statement is a financial report that shows a company’s revenues, expenses, and profits in a detailed format. Unlike a single-step statement, it separates operating income from non-operating activities.

 

[Samuel]

A multi-step income statement is a financial report that provides a detailed breakdown of a company's revenues and expenses into operating and non-operating activities, offering a more in-depth view of profitability than a single-step statement.

 

[daisy]

The multi-step income statement calculates separate subtotals for gross profit (from sales minus the cost of goods sold) and operating income (from gross profit minus operating expenses) before reaching the final net income. This format is valuable for investors, lenders, and management to better understand a company's core business operations and financial health.

 

[erwinsmith]

A multi-step income statement is an income statement that separates a company’s revenues and expenses into multiple sections to show gross profit, operating income, and net income clearly.
Key features:

1. Sales Revenue – Total sales from goods or services.
2. Cost of Goods Sold (COGS) – Direct costs of producing goods sold.
3. Gross Profit – Sales revenue minus COGS.
4. Operating Expenses – Expenses related to normal business operations (e.g., salaries, rent).
5. Operating Income – Gross profit minus operating expenses.
6. Other Income/Expenses – Non-operating items like interest or gains/losses.
7. Net Income – Final profit after all expenses and taxes.

This format provides more detailed insight into profitability compared to a single-step income statement.