What financial document summarizes the revenues, expenses, and profits of a company?

The income statement is the financial document that provides a summary of a company's revenues, expenses, and profits over a specific period of time, usually covering a quarter or a year. This statement highlights the performance of the business by showing how much money was generated from sales, how much was spent to operate the business, and the resulting profit or loss.

The income statement allows stakeholders, including management, investors, and creditors, to assess the profitability and operational efficiency of the company. It is structured to feature revenues at the top, followed by various expenses categorized as either cost of goods sold (COGS) or operating expenses, leading down to the net income figure at the bottom. This net income is a key measure of financial health, as it indicates whether the company was able to generate more revenues than expenses in the reporting period.

Understanding the income statement is critical for making informed decisions about investments, credit, and overall business strategy, as it encapsulates the essential financial workings of a company.