Definition of Income statement:
Also known as the profit and loss statement or the statement of revenue and expense, the income statement primarily focuses on the company’s revenues and expenses during a particular period.
An income statement is one of the three important financial statements used for reporting a company's financial performance over a specific accounting period, with the other two key statements being the balance sheet and the statement of cash flows.
A summary of a managements performance as reflected in the profitability (or lack of it) of an organization over a certain period. It itemizes the revenues and expenses of past that led to the current profit or loss, and indicates what may be done to improve the results.
In contrast to a balance sheet, an income statement depicts what happened over a month, quarter, or year. It is based on a fundamental accounting equation (Income = Revenue - Expenses) and shows the rate at which the owners equity is changing for better or worse. Along with balance sheet and cash flow statement it forms the basic set of financial information required to manage an organization. Also called earnings report, operating statement, or profit and loss account.
How to use Income statement in a sentence?
- When filing your taxes you should break down your income statement so that you know the right numbers to report.
- My manager was worried because he would be getting his income statement today and see how he was doing for the company.
- The income statement was a document that we mentioned in the meeting as we had already discussed the cash flow statement.
- Revenues are not receipts. Revenue is earned and reported on the income statement. Receipts (cash received or paid out) are not.
- An income statement provides valuable insights into a company’s operations, the efficiency of its management, under-performing sectors and its performance relative to industry peers.
- Total revenue is the sum of both operating and non-operating revenues while total expenses include those incurred by primary and secondary activities.
- An income statement is one of the three (along with balance sheet and statement of cash flows) major financial statements that reports a company's financial performance over a specific accounting period.
- Net Income = (Total Revenue + Gains) – (Total Expenses + Losses).
Meaning of Income statement & Income statement Definition