The  income statement, otherwise known as a profit and loss statement, basically  adds an itemized list of all your revenues and subtracts an itemized list of all your expenses to come up with a profit or loss for the period.

   An income statement allows you:

• Track revenues and expenses so that you can determine the operating performance of your business.​

• Determine what areas of your business are over-budget or under-budget.

• Identify specific items that are causing unexpected expenditures. Like phone, fax, mail, or supply expenses.

• Track dramatic increases in product returns or cost of goods sold as a percentage of sales.

• Determine your income tax liability.