A condensed income statement is one that summarizes much of the income statement detail into a few captions and amounts.
For example, a retailer’s condensed income statement will summarize hundreds of categories of sales into one amount with the description Net Sales. Its detailed purchases and changes in inventory will be presented as one amount with the description Cost of Goods Sold. Perhaps thousands of operating expenses will be presented as one amount with the description Selling, General and Administrative, or SG&A.
The readers of a condensed income statement will be able to easily and quickly focus on the company’s net income and its key components.
