An income statement is a report that a company generates in order to communicate how much money it has earned over a period of time. They’re often found as quarterly and annual reports.
In addition to communicating top-line revenue, income statements detail a number of other metrics that can be helpful to analysts and investors. These include:
- Operating expenses, which detail every expense the company encountered during the reporting period
- Depreciation, which quantifies the extent to which a company’s assets (for example, aging equipment or vehicles) have lost value over time
- Net income, which subtracts the company’s expenses from its gross revenue in order to determine its total level of profits or loss
- Earnings per share (EPS), which divides net income by the total number of outstanding shares (public company)