What is an income statement?

[niyati]

Can someone explain what an income statement is and what details it includes? I'm trying to understand how it reflects a company’s financial performance and how it's different from a balance sheet.

 

[Olivia]

An income statement is a simple report that shows how much money a business made and spent over a certain period, like a month or a year. It tells you if the company earned a profit or incurred a loss. It includes things like sales, costs, and expenses. Think of it as a financial report card that shows how well a business is doing.

 

[deepak]

An income statement is a financial report that shows a company’s revenues, expenses, and profits over a specific period, such as a month, quarter, or year. It helps assess the company’s profitability and operational performance.
Key components:

1. Revenue/Sales – Total income earned from goods or services.
2. Expenses – Costs incurred to operate the business (e.g., COGS, salaries, rent).
3. Net Income – Profit remaining after all expenses are deducted from revenue.