An income statement lists your revenue and expenses to indicate if your business is profitable or not—which is why an income statement is your business’s most important document.
An income statement lists all your sources of revenue, such as income from property you lease, or money made from sales. It also lists your direct costs, or all the money you have invested directly in creating your product or selling your service. When you subtract the direct costs from revenue, you end up with your gross profit.
Income statement names
You might also hear an income statement referred to as any of the following:
Curious about other financial documents? In this series, we’ll cover these common business documents:
