Income And Profit Statement

An income statement or profit and loss account also referred to as a profit and loss statement p l statement of profit or loss revenue statement statement of financial performance earnings statement statement of earnings operating statement or statement of operations is one of the financial statements of a company and shows the company s revenues and expenses during a particular period.

Income and profit statement. The profit or loss is determined by taking all revenues and subtracting all expenses from both operating and non operating activities this statement is one of three statements used in both corporate finance including financial modeling and accounting. For example if a company has low profit the bottom line of the profit and loss statement shows a net loss. Example following is an illustrative example of an income statement prepared in accordance with the format prescribed by ias 1 presentation of financial statements. Income statement also known as profit loss account is a report of income expenses and the resulting profit or loss earned during an accounting period.

As the income statement shows a company s performance and profitability it enables you to understand financial performance. You ll sometimes see profit and loss statements called an income statement statement of operations or statement of earnings. To aid in understanding these terms the word net is often added. Using this information a banker creditor or a lender may not provide finance.

The profit and loss statement is also called the income statement but it is different from a cash flow statement. When a company is profitable we mean that the company has a positive net income. A profit and loss statement as the name implies depicts the profitability of the company as well as the losses which occur when the expenses are deducted from the generated revenues. For example the income statement was commonly referred to as the profit and loss p l statement.