Income Statement

What is an Income Statement?

A company’s income statement subtracts all expenses from all revenues to determine the business’s profit or loss for a specific period of time. The income statement is also known as the profit and loss statement or the statement of revenue and expense.

What Items Appear In The Income Statement?

It is one of three critical documents used to evaluate a company--the other two are the balance sheet and cash flow statement. All three are included in a company’s annual report and its 10-K legal document, which is submitted to the Securities and Exchange Commission in the United States.

Analysts use the income statement to create useful ratios including return on equity (ROE); return on assets (ROA); and earnings before interest, taxes, depreciation, and amortization (EBITDA). These ratios are used to gauge the efficiency and profitability of a company.

To determine a company’s competitiveness, these calculations are compared to industry averages and to calculations for competing companies. The numbers are also compared to a company’s previous reports to determine if the management of the company is steady, improving, or struggling.

Income Statement Components

The income statement is comprised of operating and non-operating sections. Revenue and expenses from the company’s core business are included in the operating section.

The non-operating section of the report includes revenues and expenses from sources that cannot be attributed to the company’s fundamental business. For example, an ice cream business would classify ice cream sales as operating income, but the sale of a real estate holding would be considered non-operating income.

Finding an Income Statement on Investing.com

Income statements for every company listed on Investing.com can be found via the main page of an individual stock, under the Financials, e.g., Alphabet (NASDAQ:GOOGL). Annual and quarterly data can be selected using the buttons at the top left of the table. The Collapse All link at the upper right of the table hides the details of the Total Revenue and the Total Operating Expenses sections for a more compact display of the data.