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IncomeStatement 1

The income statement is a key financial document that assesses a company's profitability over a specific period by detailing revenue and expenses. It is also known as a profit and loss statement and is part of a set of financial statements that includes the balance sheet and cash flow statement. Regularly producing income statements helps companies track financial performance and make informed strategic decisions.

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14 views3 pages

IncomeStatement 1

The income statement is a key financial document that assesses a company's profitability over a specific period by detailing revenue and expenses. It is also known as a profit and loss statement and is part of a set of financial statements that includes the balance sheet and cash flow statement. Regularly producing income statements helps companies track financial performance and make informed strategic decisions.

Uploaded by

zenabbhatti786
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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The income statement is one of the core

financial statements used in business and


finance to assess the profitability of a company
over a specific period.
It’s useful for anyone running a business or
planning personal finances.
An income statement shows the revenue and
expenses of a company and calculates if the
company made a profit or loss in a specific
period.
An income statement is also known either as a
profit and loss statement (P&L) or as a revenue
statement.
The income statement is part of a set of
financial statements including the balance
sheet and cash flow statement that offer a
comprehensive view of the financial health of a
company.
Unlike a balance sheet which shows a snapshot
of a company’s financial position at a single
point in time, an income statement shows
activity over a period of time, usually a month,
a quarter, or a year.
It’s a dynamic view of the financial activities
and the results of those activities during the
covered period.
The statement usually compares periods of
time either month on month (MoM), or year on
year (YoY).
Why produce an income statement?
It’s important for companies to produce
financial statements on a regular basis.
Not just for regulatory compliance, but also to
keep track of their financial position, financial
performance, and their cash flow.
This information helps a company to make
economically informed choices for their
strategy.
It also provides an overview of the value of the
company and allows stakeholders to review the
performance of the management team.

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