Condensed income statement definition
/What is a Condensed Income Statement?
A condensed income statement reduces much of the normal income statement detail to just 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:
| Revenues | $1,000,000 |
| Cost of goods sold | 350,000 |
| Sales, general, and administrative expenses | 580,000 |
| Financing income and expenses | 20,000 |
| Net Income | $50,000 |
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, while a company manager would likely want to see more detail.