Daniel Case
BSA/310
Riordan Manufacturing Profit and Loss Statement
Paul Higel
October 22, 2012

Riordan Manufacturing Profit and Loss Statement This is a description of Riordan Manufacturing’s (Riordan) profit and loss statements, known as an income statement. Raiborn (2010) stated, “An income statement may also be referred to as a “statement of earnings” or “statement of operations”.” (p. 259). There are many way a company can write an income statement. Income statement shows the net profit of a Riordan in the fiscal year. The Net profit is the difference of income and expenses also known as profits and losses. Income is the total gross margin, whereas expenses are the sum of the total operation expenses, and the non-operation Expenses (Khan, 2009).
Income Statement The gross margin is the first portion of the income statement. The first line is the Sales line. The Sales is the total amount of product sold. Riordan sales a number of plastic products like plastic bottles, plastic fans, and blood stents. In 2010, Riordan’s total sales were 56.5 million dollars. Second line is the Direct Cost of Goods Sold (DCGS). DCGS is the manufacturing cost like raw plastics and workforce salary. In 2010, Riordan’s total DCGS were 43.9 million dollars. The gross margin is the difference of the Sales and the DCGS. Riordan total gross margin is 15 million dollars. This amount is before taxes, operation expenses, and executive pay. Operational expenses are the second portion of the Income statement. Operational expenses are the cost of running Riordan as a company, cost like offices, Sales department, and payroll. The first line of the operational expenses is the sales marketing and other. This “sales” is the cost to sell the products like the salespersons’ commission. Marketing is the advertising and market expenses. Riordan