What is income statement formula?

The income statement is also referred to as the statement of earnings or profit and loss (P&L) statement. This income statement formula calculation is done by single or multiple steps. In the case of a single step, the income statement formula is such that the net income is derived by deducting the expenses from the revenues.

How does an income statement calculate net income?

The income statement calculates the net income of a company by subtracting total expenses from total income. This calculation shows investors and creditors the overall profitability of the company as well as how efficiently the company is at generating profits from total revenues.

What is an income statement?

The term “income statement ” refers to one of the three primary financial statements the company uses to summarize its financial performance over the reporting period. The income statement is also referred to as the statement of earnings or profit and loss (P&L) statement.