The income statement is one of the three main financial statements (along with the balance sheet and the cash flow statement) that report on the financial results of a company for a given reporting period.
Net income = (total revenue + profit) - (total expenses + losses)
Total income is the sum of both operating and non-operating income, and total expenses include expenses incurred in connection with the main and ancillary activities.
“Revenue is not receipts. Income is earned and reflected in the income statement. There are no receipts (cash received or paid).
The income statement provides valuable insight into a company’s operations, its management performance, underperforming sectors, and its performance relative to industry peers.