Income statement

An income statement is like a report card that tells you how much money a person or a company has made and spent over a certain period of time, often a month, quarter, or year.

It's like when you get your allowance from your parents and you want to see if you have enough money to buy that cool toy you've been wanting.

The income statement has a list of all the money (revenue) that the person or company made by selling things or providing services. Think of it as the money coming in.

Then, on the other side of the statement, it has a list of all the money (expenses) that the person or company spent to make that revenue, such as buying inventory or paying employees. Think of it as the money going out.

And at the very bottom of the income statement, it shows whether the person or company made a profit or loss by subtracting the expenses from the revenue. If the number is positive, it means they made more money than they spent and had a profit. If the number is negative, it means they spent more money than they made and had a loss.

So, just like your report card tells you how you did in school, the income statement tells you how well a person or a company did in making and spending money.