1. Income Statement Record Keeping Curriculum
Georgia Department of Education
Agricultural Education
Written by Jimmy Scott
Georgia Ag Ed Curriculum

2. Uses of an Income Statement
Summarizing revenues and expenses
Determining profit or loss
Explaining changes in owner equity
Calculating financial measures
Profitability
Financial efficiency
Repayment capacity
Supporting loan application for refinancing 1

3. Operating Revenue Cash examples of revenue:
Cash sales
Plants/crops
Livestock
Services
Government payments
Custom work receipts
Non-cash examples of revenue:
Changes in accounts receivable
Changes in inventory
Crops/plants
Supplies 2

4. Operating Expenses Examples of cash operating expenses:
Seed
Fertilizer
Chemicals
Examples of non-cash expenses:
Depreciation
Changes in Operating Inventory 3

5. Income Statement + Change in Operating Inventory + Cash Revenues
Cash Expenses
= Net Operating Income
Depreciation
+ Gain/Loss sale of capital assets
= Return to Capital, Labor, & Mgt 4

6. 5