income statement

The financial statement of a firm that summarizes revenues (sales) and expenses over a specified time period; a statement of profit and loss. The income statement presents the financial results for a company for one quarter or one year. Typically, the income statement will provide the revenues followed by the cost of goods sold, the difference of which is the gross profit. Selling, general and administrative (SG&A) and other operating costs are then deducted to reach the operating income. Non-operating income and expenses (income and expenses not essential to operations) are then deducted to reach net profit. The statement is read from top to bottom: Net revenue is the “top-line” figure and net income is the “bottom-line” figure. The income statement can be found in the company’s annual and quarterly reports.