An Income Statement is a financial statement that shows the details of a company’s revenue, and expenses. There are totals from the income statement that are shown on the balance sheet.

This report shows the operating costs for the business subtracted from the sales or revenue. An income statement is used for external purposes, a profit and loss statement is for internal purposes. It shows the total sales revenue as well as income from investments or other sources. An income statement shows you the operating costs for your business and the net profit or loss of your business as well.