Income Statement

The Income Statement, also known as the Profit and Loss (P&L) statement, shows a company's financial performance over a specific period. It answers the fundamental question: "Is this company profitable?"

Key Metrics Explained

• Revenue: Often called the "top line," this is the total amount of money a company generates from its sales of goods and services before any expenses are deducted. Consistent revenue growth is a primary indicator of a healthy, expanding business
• Cost of Revenue: The direct costs associated with creating and delivering products or services.
• Gross Profit: Calculated as Revenue - Cost of Revenue. It shows how efficiently a company produces its goods.
• Operating Expenses: Costs not directly related to production, such as marketing (SG&A) and R&D.
• Operating Income: Calculated as Gross Profit - Operating Expenses. This shows the profit from core business operations.
• Net Income: The "bottom line." It's the final profit after all expenses, including interest and taxes, have been deducted from revenue.
• EPS (Diluted): Earnings Per Share. Calculated as Net Income / Diluted Shares Outstanding. A key metric for shareholders.