Learn how to understand Financial Statement of a company (with examples)

Author
AAHAcademy
Finance Management Course
AllAssignmentHelp Academy
  • 12 lessons
  • 6 quizzes
  • 1 week duration

3.1 What is an Income Statement?

AllAssignmentHelp Academy

The income statement shows the flow of activity and transactions over a certain period of time. The period can be monthly, quarterly, or yearly.

An income statement consists of revenue, expenses, and income.

Revenue – Expenses = Income

Let us see an example of the income statement.

AllAssignmentHelp Academy

As you can see here, $500,000 is the revenue. It is the only item that seems positive on this list. Rest are there to be deducted from this amount. After removing cost of goods sold, all expenses, and interests and taxes, the Example Corporation is left with $23,000. It is the income.