Video: Multi-Step Income Statement

In this lesson, Nick Palazzolo, CPA, breaks down the components of the multi-step income statement to show how net income is derived. He explains the significance of categorizing revenues and expenses into meaningful sections like gross profit, income from operations, and other irregular items such as discontinued operations and extraordinary items. Beyond the nuts and bolts of calculating gross profit and operating expenses, Nick provides insight into the financial story that these figures tell to stakeholders looking at a company's performance. He delves into the relevance of each section and how one-time events and ancillary business activities are represented, giving context to earnings per share as a metric of profitability. This thorough walkthrough ensures a solid understanding of the multi-step income statement's structure and its role in financial reporting.