Income Statement

An Income Statement, also known as a Profit and Loss Statement (P&L), is a fundamental financial report that summarizes a company's revenues, expenses, and profits or losses over a specific accounting period. This report provides a snapshot of operational performance and is essential for evaluating profitability.

The income statement typically includes:

• Revenue (or Sales): Total income earned from selling goods or services.

• Cost of Goods Sold (COGS): Direct costs associated with production or service delivery.

• Gross Profit: Revenue minus COGS.

• Operating Expenses: Administrative, marketing, and R&D costs.

• Operating Income: Gross profit minus operating expenses.

• Other Income/Expenses: Includes interest, gains, and losses.

• Net Profit (or Loss): The final bottom-line figure after taxes and other deductions.

Regularly analyzing the income statement helps businesses track financial health, identify trends, and make informed operational decisions.