One of four financial statements that provides information the revenues earned and expenditures incurred by the during a specified period of time. The major components of this statement include revenues (or sales), cost of sales (inclusive of cost of goods sold), operating expenses (selling, general and administrative expenses), interest expenses, depreciation expenses, and taxes paid. Non-operating items, that is revenues and expenses that have no relationship to the main operations of the business (such as gains or losses on sales of assets, foreign exchange, special subsides) are captured at the bottom of the statement to ensure that readers can assess the profitability of the business before non-operating items. Revenues minus all expenses (including interest, depreciation, taxes and non operating items equals profit if greater than zero or loss if less than zero. Profit (and loss) are not the same as Net cash inflow (or out flow).
