The income statement, also known as the profit and loss statement, is a financial report that summarizes a company's revenue, expenses, and net income over a specific period of time, typically a month or a year. The purpose of an income statement is to provide an overview of a company's financial performance by showing the amount of money generated and the costs incurred during a specified period. The income statement is an important financial tool that helps investors and stakeholders to evaluate a company's ability to generate profits and make informed decisions about the company.

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The income statement consists of several key components, including revenue, cost of goods sold (COGS), gross profit, operating expenses, operating income, and net income. Revenue is the amount of money generated by the company's sales of goods or services. COGS represents the direct costs associated with producing the goods or services sold. Gross profit is calculated by subtracting COGS from revenue. Operating expenses represent the indirect costs of running the business, such as rent, salaries, and marketing costs. Operating income is calculated by subtracting operating expenses from gross profit. Net income is the final result of the income statement and represents the amount of profit or loss for the company after all expenses have been subtracted from revenue.

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