What information is primarily shown in the income statement?

The income statement is primarily focused on presenting the revenues and expenses of a business over a specific period of time, usually a fiscal quarter or year. This financial statement provides a summary of how much money the company earned (revenues) and how much it spent (expenses), which collectively reflect the company’s profitability during that period. The difference between total revenues and total expenses results in either a net profit or a net loss, giving a clear picture of the organization’s operational performance.

While cash inflows and outflows, balances of assets and liabilities, and overall equity are important elements of a company's financial health, they are primarily detailed in other financial statements. The statement of cash flows records cash movements, the statement of financial position (or balance sheet) captures the company's assets, liabilities, and equity at a specific point in time, and the statement of equity provides insights into changes in ownership interests. Thus, the income statement stands out by concentrating on the revenue-generating activities and the costs associated with running the business.