An income statement, also known as a Profit and Loss Statement or P&L, is an essential financial document used to assess the profitability of a company. It summarizes a company’s revenues and expenses over a defined period (usually quarterly or annually) to give an overall snapshot of how much money it has earned and spent. By comparing revenues with expenses, the income statement allows businesses to determine their profitability and make informed decisions about their future growth plans. Knowing your income statement can help you monitor your financial performance, control costs, and identify areas that need improvement.