Income statements summarize a company’s revenues and expenses over a period. Abio will also assist you in calculating your company’s EBITDA, or Earnings Before Interest, Taxes, Deprecation and Amortization.
The first step in setting up your Income Statement is to identify how the account statement groups map to the income statement. Navigate to [d] General Ledger, then [u] Set Up, then [d] Statement Group.
The third tab, Income Statement (EBITDA) Mapping, allows you to identify where you want groups of accounts reported on the Income Statement:
Enter ‘C’ in the action field to adjust the mappings:
You can now add new statement groups to the Income Statement by selecting them from the list on the right.
On the left, you can select the section of the Income Statement the accounts are reported under.
Designate one statement group as type Margin. You may have to add a new statement group for this purpose. The report will subtract the costs from the revenue to populate this field.
To fine-tune the EBITDA calculation, navigate to the Account Entry screen.
You can select which accounts from the Expense section should be deducted before determining the General & Administrative Expenses, and which of those should be added in for the EBITDA calculation.
Non-cash accounts can be deducted from the Total Net General and Administrative Expenses subtotal by selecting them here.
The body of the Income Statement is the account amounts, organized as you requested in the Income Statement mapping tab on the Statement Group.
The summary section uses the account mappings to determine the EBITDA.
The first line in the summary shows the subtotal of all accounts categorized as expenses.
The next line shows the expenses, less the amounts for accounts that were selected as Add-Ins but marked to be deducted from this subtotal. These would normally be non-cash accounts.
Gross Margin is revenue less costs. The Net Income line is the Gross Margin less the expenses (prior to adding in non-cash amounts).
The last field to be calculated is the EBITDA, or Earnings before Interest, Taxes, Depreciation and Amortization. This is the Net Income, plus the amounts for accounts marked as Add-Ins.