Which financial statement summarizes a company's revenues and expenses?

The income statement is the financial statement that summarizes a company's revenues and expenses over a specific period, typically a fiscal quarter or year. It provides a detailed view of how much money a company earned through its operations (revenues) and the costs associated with running the business (expenses). The difference between these two figures results in either a profit (net income) or a loss, which is a crucial metric for assessing the company's overall financial performance.

This statement is particularly valuable for investors and management as it illustrates the company's ability to generate profit by increasing revenue, reducing costs, or both. Understanding the income statement helps stakeholders make informed decisions based on the entity's operational efficiency and profitability trends over time.