Business & Sales

What Is an Income Statement?

An income statement, also called a profit and loss (P&L) statement, is a financial statement that shows a business’s revenue, expenses, and resulting profit or loss over a period, such as a quarter or a year. It moves from revenue at the top to net income at the bottom.

Typical Structure

Revenue − cost of goods sold = gross profit; gross profit − operating expenses = operating income; after interest and taxes, the result is net income.

How It Differs

The balance sheet is a snapshot at one date; the income statement covers performance over a period.

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🔗 Related Terms

Balance Sheet Cash Flow Statement Gross Profit Cost of Goods Sold (COGS) Net Profit Margin Calendar Quarter

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Last updated: September 29, 2026. This definition is for general educational purposes only. It is not financial, investment, tax, legal, or medical advice, and it does not recommend any product or course of action. For decisions about your own situation, consult a qualified professional.