Gather the accounting period and all financial records
Determine total revenue or sales
Calculate cost of goods sold or cost of services
Subtract cost of goods sold from revenue to get gross profit
List operating expenses such as rent, salaries, utilities, and marketing
Subtract operating expenses from gross profit to get operating income
Add any other income, such as interest or gains
Subtract any other expenses, such as interest or losses
Calculate income before taxes
Subtract income tax expense
Calculate net income
Format the statement with headings for revenue, expenses, and profit
Review the figures for accuracy and consistency