An
income statement (US English) or
profit and loss account (UK English) (also referred to as a
profit and loss statement (P&L),
statement of profit or loss,
revenue statement,
statement of financial performance,
earnings statement,
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. It indicates how the revenues (money received from the sale of products and services before expenses are taken out, also known as the “top line”) are transformed into the
net income (the result after all revenues and expenses have been accounted for, also known as “net profit” or the “bottom line”). It displays the revenues recognized for a specific period, and the cost and
expenses charged against these revenues, including
write-offs (e.g.,
depreciation and
amortization of various
assets) and
taxes. The purpose of the income statement is to show
managers and
investors whether the company made or lost money during the period being reported.