Build income statements with revenue, COGS, operating expenses, and net income with margin analysis and comparison charts.
A profit and loss statement is a stack of subtractions, and this tool walks you through each one: revenue at the top, COGS subtracted to give gross profit, operating expenses to give operating income, then interest and taxes to reach net income. Every level is also shown as a percentage of revenue, so margins are visible at each step. Enter more than one period and the comparison charts show whether a change came from revenue or from costs. The thing users most often get wrong is classification, not arithmetic: label a cost as COGS instead of an operating expense and gross margin changes even though net income does not.
A concrete input and expected output from the current implementation.
Input
Revenue: $120,000 COGS: $45,000 Operating expenses: $38,000 Interest expense: $2,000 Tax rate: 25%
Expected output
Revenue: $120,000 Gross profit: $75,000 (62.5%) Operating income: $37,000 (30.8%) Net income: $26,250 (21.9%) Comparison chart: margin bars for gross, operating, and net
Each line is derived in order: 120,000 - 45,000 = 75,000 gross profit; minus 38,000 operating expenses gives 37,000 operating income; minus 2,000 interest and 8,750 tax (25% of the 35,000 pretax figure) leaves 26,250 net income. Every margin is that line divided by the same 120,000 revenue base.
Each line below revenue is derived, not entered: gross profit is revenue minus COGS, operating income subtracts operating expenses, and net income then subtracts interest and taxes. Every margin divides that line by the same revenue figure, so the percentages stay comparable all the way down. Changing one input recalculates every line beneath it.
The tool accepts more than one period at a time, such as consecutive months or quarters, and charts the periods against each other. Because margins are ratios rather than raw amounts, a small quarter compares fairly with a large one, and percentage changes are usually the more honest comparison when the two periods differ in size.
For a product business, COGS is the cost of making what you sell: materials and production labor. For a service business it is usually small. Marketing, rent, software, and administration sit below the gross-profit line. If a cost is genuinely borderline, the tool cannot decide for you, so choose deliberately and note the assumption, because the choice changes gross margin even when net income does not move.
The statement follows accrual accounting: revenue is recorded when earned and expenses when incurred, not when money changes hands. Unpaid invoices still count as revenue, and depreciation spreads a large purchase over years. Use the statement for profitability, but build a separate cash-flow view for what you can actually spend.
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