An income statement, which shows your revenue after expenses and losses, tells a story about the performance of your business over a certain time period, such as monthly, quarterly or annually. Once referred to as a profit-and-loss statement, an income statement typically includes revenue or sales, cost of goods sold, expenses, gross profits, taxes, net earnings and earnings before taxes.
Many professionals still use the term P&L, which stands for profit and loss statement, but this term is seldom found in print these days.
The income statement may have minor variations between different companies, as expenses and income will be dependent on the type of operations or business conducted. However, there are several generic line items that are commonly seen in any income statement.
The words “profits,” “earnings,” and “income” all mean the same thing and are used interchangeably. The most common income statement items in both English and Chinese include: