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Unit 9: Financial Considerations
Notes
Figure 9.1: Pro forma of Balance Sheet
Source: http://www.docstoc.com/docs/526705/Pro-Forma-Balance-Sheet
9.1.2 Income Statement
The Income Statement shows a firm’s revenues and expenses, and taxes associated with those
expenses for some financial period. Where the Balance Sheet may be thought of in terms of the
“left–right” orientation previously discussed, the income statement would be thought of in
“top–down” terms.
A basic overview of income statement items shows how a manufacturing company might
present an income statement. Income statements for other companies may appear to be slightly
different, but in general the construction would be the same.
Task Suppose you were to start up a restaurant, what are the expenses that you
need to incur? Make a list for the same.
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