Income Statement Definition
An income statement is a report that summarizes a business’s expenses and income over a specific period of time.
Income Statement Extended Definition
The income statement measures a business’s performance and, over time, can predict patterns of revenues and expenses. Also known as a profit and loss statement (P&L), income statements show the profitability of your company.
Parts of an income statement include:
- Revenue (income)
- Cost of goods sold (COGS)
- Gross profit
- Operating expenses
- Taxes and interest
- Net income or net loss (aka your bottom line)
Banks and investors refer to a company’s income statement to evaluate a business’s solvency.
Last Updated By
Jenna Hutkowski | Apr 12, 2023