Income Statement
An income statement is a financial document that summarizes a company’s revenues and expenses over a specific period of time. It is also known as a profit and loss statement (P&L) or a statement of operations. The income statement is one of the three major financial statements used to assess a company’s financial performance, along with the balance sheet and the statement of cash flows.
History of the Term
The income statement has been used for centuries to measure a company’s financial performance. The earliest known income statement was created by the Italian mathematician Luca Pacioli in 1494. Pacioli’s income statement was used to measure the profitability of a business. Since then, the income statement has evolved to become a key financial document used by investors, creditors, and other stakeholders to assess a company’s financial performance.
Comparison Table
| Revenue | Expenses | Net Income |
|---|---|---|
| $100,000 | $50,000 | $50,000 |
Summary
The income statement is a financial document that summarizes a company’s revenues and expenses over a specific period of time. It is used to assess a company’s financial performance and is one of the three major financial statements. For more information about the income statement, you can visit websites such as Investopedia, The Balance, and AccountingTools.
See Also
- Balance Sheet
- Statement of Cash Flows
- Revenue
- Expenses
- Net Income
- Gross Profit
- Operating Income
- EBITDA
- Gross Margin
- Net Margin
