What is an 'Income Statement'
An income statement is a financial statement that reports a company's financial performance over a specific accounting period. Financial performance is assessed by giving a summary of how the business incurs its revenues and expenses through both operating and non-operating activities. It also shows the net profit or loss incurred over a specific accounting period.
BREAKING DOWN 'Income Statement'
Also known as the profit and loss statement or statement of revenue and expense, the income statement is one of three major financial statements in the annual report and 10-K. All public companies must submit these legal documents to the Securities and Exchange Commission (SEC) and investor public. The other two financial statements are the balance sheet and the statement of cash flows. All three provide investors with information about the state of the company's financial affairs, but the income statement is the only one that provides an overview of company sales and net income.
[ Financial statements provide an in-depth look into a company's growth potential and liquidity risk, which makes them indispensable to investors looking for undervalued opportunities. Investopedia's Fundamental Analysis Course provides a comprehensive introduction to the subject with over five hours of on-demand video, exercises, and interactive content. You'll learn about everything from reading financial statements to interpreting financial ratios to capitalize on undervalued opportunities. ]