Income Statement
What is an Income Statement?
The Income Statement, also known as the Profit and Loss Statement, is a crucial financial document that provides a summary of a company's performance over a certain period. It displays the company's revenues, expenses, and net income or loss, helping stakeholders assess the company's operational efficiency and financial health.
Short Description: A financial statement that summarizes a company's revenues, expenses, and profits over a specific period.
- Revenues: The total income generated from sales of goods and services before any expenses are deducted.
- Expenses: Costs incurred in the process of earning revenues, such as operating expenses, cost of goods sold, and administrative expenses.
- Net Income (Loss): The remaining income after all expenses have been subtracted from total revenues. If expenses exceed revenues, the company experiences a net loss.
The Income Statement provides valuable insights into a company's ability to generate profit and efficiently manage its resources. It is used by investors, management, and analysts to make informed decisions regarding investments and operational strategies.