From the course: Build Your Financial Literacy
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Income statement and P&L statement
From the course: Build Your Financial Literacy
Income statement and P&L statement
- An income statement, otherwise known as a profit and loss, or P&L statement, is one of the three important financial documents used for reporting your company's financial performance. The income statement is the balance sheet that provides a snapshot of a company's financials through a particular period of time, usually at the end of a fiscal quarter or fiscal year. The income statement focuses on four key items, revenue, expenses, gains, and losses. It does not differentiate between cash and non-cash receipts, which are sales in cash versus sales on credit. It starts with the details of your company's sales and then works down to compute the net income. Bottom line, the income statement gives an account of how the net revenue realized by your company gets transformed into net earnings, be it at a profit or a loss. Calculating the net income on an income statement is a straightforward formula. Your net income is equal to…
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