Multi-step income statement

Income statement that uses multiple subtraction steps to arrive at the net income.  

It segregates the operating items from the non-operating items.  The multi-step income statement also shows the gross profit, operating income, income before tax, and income from continuous operations.  This allows an analyst to study the company’s gross profit margins and profits from core operations.  It also allows the analyst to study the effects of finance costs and taxes on the company’s performance.

Compare: Single-step income statement

« Back to Index