What do income statements primarily show?

Income statements primarily provide a summary of revenue and expenses over a specific time period, often a quarter or a year. This statement reflects a company's financial performance by displaying how much money the company earned (revenue) and how much it spent (expenses) during that period. The resulting figure, whether profit or loss, helps stakeholders understand the company's operational efficiency and profitability.

This focus on revenues and expenses distinguishes the income statement from other financial documents. For example, while a balance sheet examines assets and liabilities at a single point in time, the income statement continuously tracks financial movements, thus offering insight into the company's performance dynamics.