Income statement

The income statement (compte de résultat) presents all revenues and expenses of a company over an accounting period, determining the net profit or loss. It is structured in performance layers: gross profit, EBITDA, EBIT, financial result and net income. In financial due diligence, multi-year income statement analysis (3–5 years) identifies performance trends, non-recurring items and accounting manipulations. It is systematically restated to construct a normalised EBITDA, the foundation of business valuation. Under French GAAP and Swiss CO, income statement formats differ materially from IFRS — requiring specific restatement for cross-border comparisons.

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Example: analysis of a Swiss hotel company's income statement over 4 years reveals revenue growth from CHF 8.0 to 11.5 million (+44%) but stagnant EBITDA at CHF 1.6 million due to a 58% increase in personnel costs. This margin scissors — revenue growth without profitability improvement — leads the buyer to challenge the seller's business plan projections and negotiate a performance-contingent earn-out structure.

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Hectelion critically analyses income statements across multiple periods as the foundation of every due diligence and valuation engagement.