Income Statement
Revenue, expenses, and profit over a period of time.
What is Income Statement?
Also called the profit and loss statement. It flows from revenue, minus cost of goods sold (gross profit), minus operating expenses (operating income, or EBIT), minus interest and taxes, to net income. Covers a period - a quarter or a year - unlike the balance sheet, which is a snapshot.
Income Statement: a worked example
$10M revenue, $6M cost of goods sold, $2M operating expenses: $2M operating income before interest and taxes.
What is the difference between Income Statement and Balance Sheet?
Income statement = performance over a period (a movie). Balance sheet = position at a moment (a photograph).
Often confused with Balance Sheet - see Income Statement vs Balance Sheet side by side.
More terms in Economics & Financial Reporting
Business Cycle
The recurring pattern of expansion, peak, contraction, and trough.
Leading, Coincident & Lagging Indicators
Data series that move before, with, or after the business cycle.
Deflation vs. Disinflation
Falling prices versus a slowing rate of price increases.
Currency Valuation & Exchange Rates
What one currency buys of another, and who wins when it moves.
Sovereign Debt
Bonds issued by a national government.
Trade Deficit
A country imports more goods and services than it exports.
Balance Sheet
Assets, liabilities, and equity at a single point in time.
Statement of Cash Flows
Where cash came from and where it went: operating, investing, financing.