Income Statement

What does it mean

An income statement, also known as a profit and loss statement, is a financial report that outlines a company's revenues, expenses, and profits over a specific period. It showcases the business's ability to generate income, manage costs, and ultimately achieve profitability.

A income statement typically follows the following format:


(-) Cost of Goods Sold

(=) Gross Profit

(-) Operating Expenses

(=) Net Operating Income

(+/-) Other Income/Expenses

(=) Net income


Why does it matter

For a banker, scrutinizing income statements is vital in evaluating a borrower's financial performance, understanding their revenue streams, and assessing the sustainability of their operations. This analysis helps bankers gauge the borrower's capacity to service debts, make informed lending decisions, and manage potential risks associated with the business's financial position.


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A bit about me

Greetings! I'm Clay Sharkey, and there is nothing I like more than assisting others in achieving their goals. I firmly believe that by enhancing a banker's understanding of their customer's' business, they can provide superior service. This superior service, in turn, leads to stronger relationships for the bank, improved performance for the businesses, and better experiences for our communities.  Win-win-win.