income statement

Financial reports on the cash flow of a business or property. See Cash Flow; Rent Roll.

Financial reports on the cash flow of a property. See Cash Flow, Rent Roll.

A financial statement that gives operating results for a specific period; also referred to as earnings report, operating statement, and profit-and-loss statement. Statements normally cover 12 months of operations with interim statements at quarterly periods in current fiscal or calendar years. Operations divide into two categories of transactions-sales or revenue generation and expenses incurred in the production of sales or revenues. A typical manufacturing business sells products to its customers which, net of returns and discounts, results in "net sales" income. Net income or profit is "net sales" less all expenses. Net income is obtained after taxes are deducted at the prevailing rate. Net income (or "loss" should expenses exceed sales) is available to invest in the business, pay dividends, etc., as decided by owners of the enterprise. The principal expense item is usually cost of goods sold, which includes purchase of raw materials, direct labor and factory overhead such as power, rent, etc. Next comes selling, general, and administrative expenses, which include salaries of salespersons, staff personnel, managers and offices, cost of administrative buildings and support services, and advertising expenses. Depreciation expense is stated separately since it is not an actual cash outlay and since additional comment on the method used in calculating depreciation is required. As discussed under balance sheet, depreciation can be either straight line or accelerated. Both methods result in the same total depreciation, but accelerated methods move most of the expense into early years which reduces reported profits and taxes on production from new machinery and equipment. Interest on debt is deducted next, resulting in pretax profit.

The noun has one meaning:

Meaning #1: a financial statement that gives operating results for a specific period
  Synonyms: earnings report, operating statement, profit-and-loss statement