Income Statement Model

The model builds revenue from three distinct streams rather than a single growth line. Product sales combine units and unit price, with volume and price each escalating on separate assumptions, so demand growth can be examined independently of pricing power.

• The services book compounds on its own contract growth rate, while the annual contract fee tracks the same price escalator used by the product line, keeping pricing consistent across the business. Support and maintenance is not forecast independently; it attaches to product revenue at a fixed rate, mirroring how a maintenance base is sold against the installed product.
• The three streams sum to total revenue, with a year-on-year growth row showing the combined movement.

Cost of sales is assembled from four components, and three of them are geared to the specific stream each one serves. Materials and components follow product revenue, direct service labour follows services revenue, and support delivery cost follows support revenue.

• Only freight and fulfilment runs on total revenue. Because direct costs are tied to their own streams rather than to a single blended percentage, gross margin emerges as a consequence of revenue mix.
• If the mix shifts toward a stream carrying a heavier direct-cost load, the blended margin compresses without any assumption being edited. This design makes the statement sensitive to mix, which is the intended mechanism.

Operating expenses are anchored by a headcount schedule built in three steps. Headcount rolls forward from an opening FTE count plus a fixed annual intake, average salary escalates at wage growth, and a benefits load grosses salary into a fully loaded cost per FTE.

• Salaries and benefits is then headcount multiplied by that fully loaded cost. Other operating lines are geared to revenue or to their own escalation, with rent and facilities rising on lease inflation.
• Because headcount growth can be set independently of revenue growth, the model exposes operating leverage: when headcount grows more slowly than revenue, EBITDA margin widens, and changing the intake assumption reverses that effect.

Below gross profit, the statement walks through total operating expenses to EBITDA, then deducts depreciation and amortisation to reach EBIT, subtracts interest, applies tax and arrives at net income, with a four-line margin block alongside. Interest is charged on the opening loan balance within an amortising schedule, so the charge falls as the loan is repaid rather than sitting static.

• Tax is floored at zero, so a loss year carries no tax credit rather than an implausible negative charge. Two check rows must resolve to zero in every period.
• The template suits annual budgeting and five-year forecasting, and lets you test pricing, revenue mix, hiring pace and the cost of debt.