Income Statement

Income Statement, also known as a Profit and Loss (P&L) Statement (Definition)

Income Statement, also known as a Profit and Loss (P&L) Statement:

A financial report that provides a summary of a company's revenues, costs, and expenses over a specific period, such as a quarter or a year.

The income statement shows the company's ability to generate profit by calculating the difference between total income and total expenses. If revenues exceed expenses, the company records a profit; if expenses exceed revenues, the company incurs a loss.

This statement is crucial for understanding a company's financial performance and is commonly used by management, investors, and other stakeholders to assess profitability and make informed decisions.