Reviewing income statements comes easy for Eric Carstensen since he teaches at the GIA School of Business. During the recent JCK Show ~ Phoenix 2005, the professor quickly summarized the key points of an income statement in a seminar on understanding cash flow. Below is some of the info he shared with jewelers.

• Sales– Cost of Goods Sold = Gross Margin (or Gross Profit)

• Gross Margin – Operating Expenses = Operating Profit

• Operating Profit– Other Income – Other Expenses = Income Before Taxes (Interest Income/Expense, Gain/Loss on Disposal of Assets, Other Non-Operating Items)

• Income Before Taxes– Taxes = Net Income (or Profit)
  To reach Carstensen or for more information about the GIA School of Business, call (800) 421-7250 x4001, or visit www.gia.edu/education/24246/school_of_business.cfm.