An income statement provides insight into a company's operations, efficiency, management, and performance relative to others in the same sector. The income statement can be presented in a single-step or multi-step format. The income statement is an integral part of company performance reports.

Income statement reports show financial performance based on revenues, expenses, and net income. By regularly analyzing your income statements, you can gather key financial insights about your company, such as areas for improvement or projections for future performance.

It includes a company's revenue, expenses, and net income. What Is an Income Statement? An income statement, also known as the profit and loss (P&L) statement, summarizes a company's revenue, expenses, gains, and losses over a specific accounting period.

An income statement starts with a company’s revenue and ends with its net profit. To calculate net profit, operating and non-operating expenses, such as cost of goods sold or SG&A (Selling, General & Administrative expenses), are subtracted from revenue. Understanding the income statement is crucial for investors to analyze a company’s long-term outlook.