What does the income statement report?

The income statement, also known as the profit and loss statement, is designed to provide a summary of a company's revenues, expenses, and the resulting profit or loss over a specific period, typically covering a quarter or a year. This financial report is crucial for assessing the financial performance of a business, as it details how much money the company made (revenues), how much it spent (expenses), and what remains as profit or is lost during that timeframe.

This statement allows stakeholders, including management, investors, and analysts, to evaluate the company's operational efficiency and profitability. By focusing on the results within a certain period, it helps in understanding trends in income and expenses, aiding in forecasting future performance and making informed business decisions.