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What is an income statement?

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Quick answer

An income statement is a financial report showing a company's revenues, expenses, and resulting profit or loss over a period. Also called a profit-and-loss (P&L) statement, it answers the key question: did the business make money? It shows revenue, expenses, and profit over a period.

Key things to understand

  1. It shows revenue, expenses, and profit over a period.
  2. Also called a profit-and-loss (P&L) statement.
  3. It reveals whether a business is profitable.
  4. It's one of the three core financial statements.

People also ask

What is an income statement?
A report of a company's revenues, expenses, and profit or loss over a specific period.
What's the difference between an income statement and a balance sheet?
An income statement covers performance over a period; a balance sheet is a snapshot of assets and liabilities at one moment.
What is the bottom line?
The net profit or loss at the end of the income statement, after all expenses.