Definition
The income statement (profit & loss statement) reports a company's financial performance over a quarter or year. It starts with revenue, subtracts various expenses (COGS, operating expenses, interest, taxes), and arrives at net income. It shows profitability trends.
Formula
Example
Revenue: $100M, COGS: $40M (Gross Profit: $60M), OpEx: $30M (Operating Income: $30M), Interest: $5M, Taxes: $6M. Net Income: $19M.
FAQ
What is Income Statement?
A financial statement showing revenue, expenses, and profit over a period.
How do you calculate Income Statement?
A common formula for Income Statement is: Net Income = Revenue - COGS - Operating Expenses - Interest - Taxes
Why is Income Statement important?
Income Statement helps investors evaluate financial statements and make more informed decisions.
Related Terms
Balance Sheet
A financial statement showing assets, liabilities, and equity at a point in time.
Cash Flow Statement
A financial statement showing cash movements from operations, investing, and financing.
Revenue (Sales)
The total income from selling goods or services before any expenses.
Net Income
The bottom line profit after all expenses, interest, and taxes.