A condensed income statement is simply an income statement with many of the usual line items condensed down into a few lines.
Typically, this means that all revenue line items are aggregated into a single line item, while the cost of goods sold appears as one line item, and all operating expenses appear in another line item. A typical format for a condensed income statement is:
|Cost of goods sold||350,000|
|Sales, general, and administrative expenses||580,000|
|Financing income and expenses||20,000|
The effects of income taxes might be stated in a separate line item.
A condensed income statement is typically issued to external parties, who are less interested in the precise sources of a company’s revenues or what expenses it incurs, and more concerned with its overall performance. Thus, bankers and investors may be interested in receiving a condensed income statement.