Income Statement (P&L)

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)