Multistep Income Statement | Example

This video presents an actual example of a multi-step income statement by showing the income statement for the company Newell Brands.

While a single-step income statement simply subtracts a company's total expenses from its total revenues to obtain net income, a multi-step income statement distinguishes between operating and nonoperating items and shows several profit subtotals before arriving at net income. These subtotals include:
(a) gross profit
(b) operating income
(c) earnings before taxes
(d) income from continuing operations (this appears before discontinued operations when the company disposed of a product line or business segment during the period)

A multi-step income statement is thus more helpful than a single-step income statement in evaluating a company's performance and its ability to manage the various types of expenses.
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