The Income Statement

The income declaration, or declaration of operations, procedures presentation over a precise period of time, usually reported on a periodical and an annual basis. The accounting classification of income is

Revenue - expenses  =   income

Unlike the balance sheet, which is a snapshot at a point in time, the profits statement shows financial dealings over an episode of time.

The income statement includes numerous important pieces of information. The operation section intelligence the firm's revenues and expenses from its principal business operation. Among other things, the no operating section of the income statement includes stipulation for all of the firm's financing costs, such as attention expenditure. Usually a second section reports as a disconnect item the amount of income taxes. The last item on the income statement is the bottom line, or net income. Net income is regularly expressed per share of out- standing frequent stock, that is, earnings per divide.

When analyzing an income declaration, one should keep in intelligence three concepts:

1. Noncash items

2. GAAP

3. Time and costs