The income statement is one of three major financial statements used to describe a company’s financial performance during a given accounting period, with the balance sheet and the statement of cash flows being the other two.
The income statement, also known as the profit and loss statement or the statement of revenue and expense, focuses on the company’s earnings and costs during a specific time period.
An income statement is one of the three primary financial statements that summarises a company’s financial performance during a given accounting period (together with the balance sheet and the statement of cash flows).
Net Income = (Total Revenue + Gains) – (Total Expenses + Losses)
An income statement may reveal a lot about a company’s operations, managerial efficiency, underperforming areas, and performance in comparison to industry rivals.
Income statement is one of the important financial statements, it shows a company’s profit and loss over a period of time.
It is basically made up of two things, Revenues and Expenses.
If Revenues are more than expenses, it means the company is in profit, but if Expenses are more than revenues then it means the company is facing losses.