Sample Income Statement

The best way to learn to read an income statement is to begin by looking at a real world example. In this case, I'm going to take an old income statement from Microsoft because it is relatively simple, enough time has passed for us to look at the figures in retrospect, and you can look at it to get an idea of what an ordinary income statement looks like. You can see this sample at the bottom of this page. You may want to print it for reference as you work your through this lesson.

It's important to note that not all income statements look alike, although they necessarily contain much of the same information. As we work our way through various income statements, you will inevitably find they are much simpler and comparable than may appear at first glance.

Next page > Let's start walking through the income statement ... > Page 1, 2, 3, 4, 5, 6, 7, more >>

This page is part of Investing Lesson 4 - How to Read an Income Statement. To go back to the beginning, see the Table of Contents.

Sample Income Statement

Microsoft Income Statement
Fiscal year	2001	2000	1999
Total Revenue	$28,365,000,000	$$25,296,000,000	$$22,956,000,000
Cost of Goods Revenue	$5,191,000,000	$3,455,000,000	$3,002,000,000
Gross Profit	$23,174,000,000	$21,841,000,000	$$19,954,000,000
Operating Expense
Research and Development	$4,307,000,000	$4,379,000,000	$3,775,000,000
Selling, General, and Administrative Expenses	$6,957,000,000	$5,742,000,000	$5,242,000,000
Non Recurring	N/A	N/A	N/A
Other Operating Expenses	N/A	N/A	N/A
Operating Income
Operating Income	$11,910,000,000	$11,720,000,000	$10,937,000,000
Total Other Income and Expenses Net	($397,000,000)	($195,000,000)	$3,338,000,000
Earnings Before Interest and Taxes	$11,513,000,000	$11,525,000,000	$14,275,000,000
Interest Expense	N/A	N/A	N/A
Income Before Taxes	$11,513,000,000	$11,525,000,000	$14,275,000,000
Income Tax Expense	$3,684,000,000	$3,804,000,000	$4,854,000,000
Equity Earnings or Loss Unconsolidated Subsidiary	N/A	N/A	N/A
Minority Interest	N/A	N/A	N/A
Net Income from Continuing Operations	$7,829,000,000	$7,721,000,000	$9,421,000,000
Nonrecurring Events
Discontinued Operations	N/A	N/A	N/A
Extraordinary Items	N/A	N/A	N/A
Effect of Accounting Changes	N/A	($375,000,000)	N/A
Other Items	N/A	N/A	N/A
Net Income	$7,829,000,000	$7,346,000,000	$9,421,000,000