Income Statement
A financial statement summarizing a company's revenues, expenses, and profit over a specific period.
What is Income Statement?
The income statement, also called the Profit and Loss Statement (P&L) or Statement of Operations, reports a company's financial performance over a specific accounting period — typically a quarter or a full year. It starts with total revenue at the top and systematically subtracts cost of goods sold, operating expenses, interest, and taxes to arrive at net income at the bottom. Key subtotals include gross profit, operating income (EBIT), and earnings before interest and taxes. The income statement is the primary measure of profitability and the foundation for most valuation metrics such as P/E ratio, EPS, and profit margins.
Example
Microsoft's FY2024 income statement showed revenue of $245 billion, operating income of $109 billion, and net income of $88 billion — demonstrating an operating margin above 44%, among the highest of any large-cap company globally.