Evan Fletcher | The Income Statement: Analyzing Revenue and Expenses

The income statement, also known as the profit and loss statement, summarizes the company's revenues and expenses over a specific period, usually a fiscal quarter or year. This statement provides a clear view of the company's operational performance, indicating whether it is profitable or operating at a loss. Key metrics on the income statement include gross profit, operating income, and net income.

Gross profit is calculated by subtracting the cost of goods sold (COGS) from total revenue. It reflects the efficiency of production processes and the ability to manage direct costs. Operating income, which is gross profit minus operating expenses, indicates the profitability of the company's core business activities. Net income, the bottom line of the income statement, shows the company's overall profitability after accounting for all revenues and expenses, including taxes and interest. By regularly analyzing these metrics, entrepreneurs like Evan Fletcher (Georgia) make informed decisions about cost management, pricing strategies, and expansion plans.