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I'm looking at an income statement and confused at how to interpret its figures. I understand what gross profit, operating profit, and net profit are. The statement I'm looking at says that the company had a revenue of 220,000 and a cost of revenue of 840,000 making its gross profit -620,000. I understand that. The company spend more money than its sales brought it.

What i don't understand is that then the statement says its total operating expense is -2,450,000 and its operating income is 2,670,000. I don't understand how the operating expense can be negative and how the final operating income can be higher and positive?

The company had an unusual expense of -4,180,000.

Please help! Thank you.

  • Which company is it? – Ben Miller - Reinstate Monica Aug 26 '16 at 17:08
  • aurora cannabis in canada - by the way i was looking at the income statement on google finance if that makes a difference – Snerd Aug 26 '16 at 17:12
  • Income statement for what period? It would help if we could look at the statement, can you post a link to exactly what you're looking at? – Chris Aug 27 '16 at 3:44
  • Nvm, did my own research. Here's the link for others that are curious. It's for the 3 months ended 3/31/2016. – Chris Aug 27 '16 at 3:47
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Sedar is I guess the Canadian equivalent of EDGAR. You can find the company's filings there.

Here's a picture from their filings. Can't post the link, if you go and find the filing through Sedar you'll know why (it's not as nice a site as EDGAR).

The 4.8 million is from unrealized gain on biological assets. So that's what it is. The reason, I think, as to why Operating Income is a positive 2.67 even though Operating Expense and Gross Profit are both negative is because Google Finance backed into Operating Expense. Operating Income is the same between the two sources, it's just the unrealized gain that moves.

enter image description here

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Judgement, settlement, insurance proceeds, etc etc. These would probably be recorded as a negative expense in the same category where the original expense was recorded.

  • But what does a negative expense mean? Thank you for your help by the way! – Snerd Aug 26 '16 at 16:47
  • @Snerd refund, rebate, return of money – littleadv Aug 27 '16 at 4:31

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