Also called profit and loss statement, an income statement is a financial statement that shows sales, cost of sales, gross margin, operating expenses, and profits or losses.

Gross margin is sales less cost of sales, and profit (or loss) is gross margin less operating expenses and taxes. The result is profit if it’s positive, loss if it’s negative.

For more, check out What Is an Income Statement? on Bplans, and How to Read and Understand Your Profit and Loss on the LivePlan blog.

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Bplans GlossaryBplans Glossary

At Bplans, it's our goal to make it easy for you to start and run your business. Our glossary of common business terms will help you learn about key small business and entrepreneurship topics, to help you plan, fund, and grow your business.