Investing term

What is Income statement?

The 'movie' statement — what came in (revenue), what was spent (costs), and what was left as profit, over a period.

The income statement is the "movie" of a company's performance over a period: revenue at the top, costs subtracted line by line, and profit at the bottom. It shows how a company makes (or loses) money and where the costs go. Unlike the balance sheet's single-date snapshot, it covers a span of time — a quarter or a year of business.

For example

An income statement runs from $10M in revenue down through costs and taxes to a $1.5M net profit — the whole story of one period's earnings.

Income statement is taught hands-on in Stage 14 — Reading Financial Statements.

See the lesson →

Related terms

Accounts receivable (A/R)Money customers owe the company for goods or services already delivered but not yet paid.AccrualsAccounting entries that record revenue or expense before cash actually moves.Annual reportThe yearly disclosure that includes audited financials, MD&A, and footnotes — the primary source for serious investors.Balance sheetThe 'photo' statement — what the company owns, what it owes, and what's left for owners, on a single date.
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