A report showing revenue, expenses, and profit over a period of time.
For example, a lender reviewing a 3-year-old construction company's income statements sees that revenue grew from $800,000 to $1.4 million while net profit margins held steady at 12%, providing evidence of a profitable, growing business able to support a new equipment loan.
Why it matters: It answers the most fundamental question: is the business actually making money after all expenses are paid?
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