Net Income: Revenue– Expenses
Net Sales: Gross Sales – Sales Returns and Allowances
Total Inventory: Beginning Inventory + Purchases
Cost of Goods Sold: Total Inventory – Ending Inventory
Gross Profit/Net Operating Income: (Net Sales – Cost of Goods Sold) – Total Expenses
Assets: Liabilities + Equity
Calculating gross profit for an organization does not provide the complete picture an organization’s financial health. Healthcare Administrators often review key financial information regarding the organization’s profit and losses. One representation of this information is found on the organization’s primary financial statements, the Income Statement, and the Balance Sheet. Often these financial statements are provided to a HCA by the organization’s accountant and understanding the information contained in these, and how it is calculated, is crucial to identifying potential issues and future opportunities.
Use the Income Statement Questions Word document as you complete the Excel Income Statement by entering the supplied values from the Word document for March and April. Once you have completed the entries on the Income Statement, use the totals to answer questions on the Income Statement Questions Word document.
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