An Income Statement, also known as a Profit and Loss Statement, is a financial statement that reports a company’s revenues, expenses, and net income or loss for a specific period of time. It provides information about a company’s profitability and can be used to assess its financial performance.
The income statement is divided into two main sections: revenue and expenses. Revenue is the amount of money a company earns from its primary business operations, while expenses are the costs associated with those operations.
To read and use an income statement, it is important to understand the following:
In summary, the income statement provides valuable information about a company’s revenue, expenses, and profitability, and can be used to assess its financial performance. By understanding the information presented on the income statement, investors and other stakeholders can gain a better understanding of the company’s financial health and make more informed decisions about their investments.