What is the income statement?
The income statement is a calculation which shows the profit or loss of an accounting unit during a specific period, providing a summary of how the profit or loss is calculated from gross revenue and expenses
The purpose of the income statement is to show managers and investors whether the company made or lost money during the period being reported. The important thing to remember about an income statement is that it represents a period. This contrasts with the balance sheet, which represents a single moment in time.
Income statements should help investors and creditors determine the past financial performance of the enterprise, predict future performance, and assess the capability of the business to generate future revenue streams through the reporting of income and expenses.