Income Statement

A Real Example of an Income Statement

Below is an example of Amazon’s consolidated statement of operations, or income statement, for the years ended December 31, 2015 – 2017. Take a look at the P&L and then read a breakdown of it below.

Income Statement

Starting at the top, we see that Amazon has two different revenue streams – products and services – which combine to form total revenue.

There is no gross profit subtotal, as the cost of sales is grouped with all other expenses, which include fulfillment, marketing, technology, content, general and administration (G&A), and other expenses.

After deducting all the above expenses, we finally arrive at the first subtotal on the income statement, Operating Income (also known as EBIT or Earnings Before Interest and Taxes).

Everything below Operating Income is not related to the ongoing operation of the business – such as non-operating expenses, provision for income taxes (i.e., future taxes), and equity-method investment activity (profits or losses from minority investments), net of tax.

Finally, we arrive at the net income (or net loss), which is then divided by the weighted average shares outstanding to determine the Earnings Per Share (EPS).

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