What the document shows
An income statement shows how much revenue a company generated, how much it spent, and how much profit (or loss) remained over a given period, such as a year or a quarter. While a balance sheet shows a snapshot at a specific point in time, an income statement shows business performance over a period (a flow).
The structure of step-by-step profit
Profit is calculated in stages: gross profit (revenue minus cost of sales), operating profit (gross profit minus selling, general and administrative expenses), ordinary profit (operating profit adjusted for non-operating income and expenses), and finally net income (adjusted further for extraordinary items and taxes). Understanding which revenues and expenses each stage reflects makes it easier to read a company's earnings results.