An income statement, also known as a profit and loss statement, is a financial document that summarizes a company’s revenues, expenses, and profits over a specific period, typically a fiscal quarter or year. It provides a detailed account of how revenue is transformed into net income, illustrating the company’s operational efficiency. Key components include total revenue, cost of goods sold, gross profit, operating expenses, and net income. Understanding the income statement is crucial for assessing financial health and making informed business decisions.