{"id":4501,"date":"2021-06-08T12:34:43","date_gmt":"2021-06-08T18:34:43","guid":{"rendered":"https:\/\/web.blockadvisors.com\/?p=4501"},"modified":"2025-01-23T13:54:26","modified_gmt":"2025-01-23T19:54:26","slug":"what-is-an-income-statement","status":"publish","type":"post","link":"https:\/\/www.blockadvisors.com\/resource-center\/finance\/what-is-an-income-statement\/","title":{"rendered":"What is an income statement?"},"content":{"rendered":"
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\"income<\/figure>\n<\/div>\n\n\n

What is one of the best ways to gain insight on profitability, decision making, and change implementation for your small business? The answer \u2013 an income statement. Learn more about what an income statement is, why it serves as a key tool in a small business owner\u2019s toolkit\u2014and why banks might be interested in reviewing your income statement for a loan in this post.<\/p>\n\n\n\n

Income statement definition<\/h2>\n\n\n\n

First, let\u2019s start with an income statement definition. It\u2019s a financial document that reveals how your business is doing from a financial standpoint over a specific reporting period.<\/p>\n\n\n\n

Income statement example<\/h2>\n\n\n\n

Below is an income statement example created by Block Advisors. There is no difference between an income statement and a P&L. (See: What is a P&L Statement?<\/a>) The two are synonymous. You can use this as an income statement template, and do the calculations behind the scenes.<\/p>\n\n\n\n

We get that small business owners may not have the time to crunch those numbers. Thankfully, Block Advisors can help lighten your load. As part of your annual tax prep, we can create an income summary for your business, so you can get the business insights you need and continue to focus on what you love. <\/p>\n\n\n\n

\"profit<\/figure>\n\n\n\n

What does an income statement show?<\/h2>\n\n\n\n

Wondering, \u201cwhat does an income statement show?\u201d Essentially, it shows your net income by subtracting your losses and expenses from all revenue and gains. You can also use it to find out what areas of your business are under or over budget.<\/p>\n\n\n\n

It\u2019s also referred to as a profit and loss statement<\/a> or net income statement; and it supports other financial documents like balance sheets, cash flow statements, and a statement of earnings.<\/p>\n\n\n\n

You\u2019ll find both single- and multiple-step income statements. With a single-step income statement, you subtract your total expenses from your total revenue to arrive at your net profit. With multiple-step income statements, it\u2019s a little more involved. We\u2019ll cover that next.<\/p>\n\n\n\n

What goes on an income statement?<\/h2>\n\n\n\n

Multiple-step income statements include multiple calculations (hence the name) and require a lot more detail. Curious about what goes on an income statement? Here are the elements for the multiple-step income method.<\/p>\n\n\n\n