The Income Statement is one of the core financial statements in a company. The statement shows the profit and loss over a period of time.
Income statement and its purpose
The primary purpose of an income statement is to show whether a company has profit or loss within the given fiscal year. Achieving this insight involves meticulously examining all operating revenues and operating expenses for the said period. By subtracting total expenses from revenues, one arrives at the annual result before tax—a crucial indicator of a company’s operational success.
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The annual report
The income statement serves as a fundamental component of a company’s annual report, offering stakeholders a comprehensive view of its financial performance. Alongside the income statement, the annual report typically includes the balance sheet, notes, and cash flow statement.