Field Notes
On the Frontier
This is a living laboratory. It features experiments in human-AI collaboration, creativity, and business management.
MBA Boot Camp: The Income Statement (2.2)
The Income Statement (also called the Profit & Loss statement, or P&L) is like a video recording. It shows what happened over a period of time (a quarter or a year).
You read it like a waterfall, starting at the top and deducting expenses until you reach the bottom:
Revenue: (Money comes in from selling products).
Minus COGS: (The direct cost to make those products).
Equals Gross Profit: (How much money is left over to run the business).
Minus Operating Expenses: (Salaries, marketing, rent, R&D).
Equals Operating Income: (Profit from the core business).
Minus Taxes & Interest: (The cost of government and debt).
Equals Net Income: (The final profit).