Calculating the income statement

The income statement measures the economic performance of your company over a given period (a month, a quarter, a fiscal year). Unlike the balance sheet, which is a snapshot at a point in time, the income statement tells the story of what happened between two dates. It answers the fundamental question: is your business profitable?

SYSCOHADA income statement structure

The SYSCOHADA revised 2019 plan distinguishes three main components:

Section	Accounts	Content
Ordinary activity revenue	Class 7	Revenue, grants, provisions written back
Ordinary activity expenses	Class 6	Purchases, staff costs, depreciation, taxes
Extraordinary items (HAO)	Class 8	Exceptional income and expenses

Net result = Revenue (cl. 7) − Expenses (cl. 6) ± Extraordinary result (cl. 8)

Accessing the income statement

From the navigation bar: Financial Statements → Income Statement.

1. Select the fiscal year from the dropdown menu. 2. Adjust the period (start date / end date) for a partial income statement (monthly, quarterly).
2. SynkriaOps automatically calculates all totals from posted documents. 4. Click Export → PDF or Export → Excel to download the report.

Tip

To compare two years side by side, generate the income statement for year N then use the comparison filter to display N-1 alongside. This immediately highlights cost drift or margin erosion.

Intermediate margin ratios

The intermediate ratios break down the result into stages to pinpoint exactly where in the business profitability is earned or lost.

Gross margin on merchandise

Gross margin = Merchandise sales (701) − Merchandise purchases (601) − Stock movements (6031)

The gross margin measures the profitability of your trading activity before any overhead. A gross margin rate (margin / revenue) below the sector average signals a pricing or purchasing cost problem.

Output for the period

Output = Product sales (702) + Work in progress (73) + Capitalised production (74)

For a pure trading company, output is often zero (only merchandise sales count).

Value added (VA)

VA = Gross margin + Output − External consumption (602, 604, 605, 606, 61, 62, 63)

External consumption covers all purchased services: rent, telecommunications, transport, professional fees, advertising, insurance. VA measures what the company genuinely creates beyond its suppliers.

Earnings before interest, taxes, depreciation and amortisation (EBITDA / EBE)

EBE = VA − Staff costs (64) − Taxes and duties (65)

EBE is the potential cash flow generated by pure operations, before financing and before depreciation. It is the key indicator used by banks to assess debt repayment capacity.

Operating result (EBIT)

EBIT = EBE − Depreciation and provisions (681, 691)

The operating result incorporates the wear on fixed capital (depreciation). A positive EBIT means the core activity is profitable, regardless of financing structure.

Financial result

Financial result = Financial income (77) − Financial expenses (66)

Includes loan interest (negative) and investment returns (positive). In practice, most SMEs have a negative financial result because they are repaying loans.

Net result

Net result = EBIT + Financial result ± Extraordinary result − Income tax (89)

This is the result that will be recorded in account 12 of the balance sheet after year-end closing.

Full example — Cameroonian distribution SME (85,000,000 XAF revenue)

Ratio	Amount (XAF)	% of revenue
Revenue (701)	85,000,000	100.0%
− Merchandise purchases (601+6031)	52,700,000	62.0%
= Gross margin	32,300,000	38.0%
− External consumption (61+62+63)	8,500,000	10.0%
= Value added	23,800,000	28.0%
− Staff costs (64)	9,200,000	10.8%
− Taxes and duties excl. income tax (65)	1,350,000	1.6%
= EBE (EBITDA)	13,250,000	15.6%
− Depreciation (681)	2,800,000	3.3%
= Operating result (EBIT)	10,450,000	12.3%
+ Financial income (77)	120,000	0.1%
− Financial expenses (66)	1,640,000	1.9%
= Result before tax	8,930,000	10.5%
− Income tax (89)	1,430,000	1.7%
= Net result	7,500,000	8.8%

Tip

A gross margin rate of 38% is typical for a distribution business in Central Africa. Below 25%, review your pricing policy and supplier purchasing terms.

Verification: result ≠ account 12

If the result shown in the income statement differs from the balance of account 12 in the trial balance, common causes are:

Observed discrepancy	Likely cause	Solution
Income statement result > account 12 balance	Class 6 or 7 documents are still in DRAFT	Post the missing documents
Income statement result < account 12 balance	A manual journal entry has been posted to account 12 outside the closing process	Check the general ledger of account 12
Unexpectedly negative result	Incorrect opening balances — N-1 expenses have been carried forward	Check the AN journal in the general ledger
Zero result mid-year	Normal — account 12 is only populated at year-end closing	No action required

Caution

During an open fiscal year (not yet closed), the SynkriaOps income statement reflects revenue and expenses posted to date. Account 12 in the trial balance remains at zero until closing — this is the expected behaviour.

Common errors

Error	Cause	Solution
Revenue understated	Invoices in DRAFT or not posted	Post all invoices for the period
Zero staff costs	Payroll entries not recorded	Post payroll documents (641, 642 accounts)
Negative EBE	Overhead too high relative to gross margin	Analyse external consumption line by line
Empty income statement	No posted documents in the period	Check the period filter and document statuses

What’s next?

• Calculating the SYSCOHADA balance sheet — The net result calculated here is the same figure that appears in account 12 of the balance sheet after closing.
• Calculating the TAFIRE — The TAFIRE explains how net result translates into actual cash flows.