CHAPTER TWOThe Income Statement
The income statement, often called a statement of operations or a profit and loss statement (P&L), describes the performance of the company over a period of time, usually a month, a quarter, or a year. This information measures the company’s achievement (revenue) and the resources (expenses) that were expended in order to produce that achievement. The income statement is summarized as follows:
Revenue − Expenses = Profit
The difference between revenues achieved and expenses incurred is called profit or net income.
The following paragraphs describe the details of the income statement. As a reference, we have provided a five-year history of the Metropolitan Manufacturing Company in Exhibit 2-1. This is part of the ...
Get The Essentials of Finance and Accounting for Nonfinancial Managers, 2nd Edition now with the O’Reilly learning platform.
O’Reilly members experience books, live events, courses curated by job role, and more from O’Reilly and nearly 200 top publishers.
