Which financial report shows the earnings and expenses over a specific period?

The Income Statement is the financial report specifically designed to outline a company’s earnings and expenses over a designated period, typically a fiscal quarter or year. This statement reflects the company's revenue generation, the various costs incurred in operating the business, and ultimately calculates the net profit or loss.

Understanding the format of the Income Statement is crucial; it begins with total revenue, includes cost of goods sold (if applicable), then lists all operating expenses, taxes, and any other types of expenses, culminating in the net income. This allows stakeholders, including management, investors, and analysts, to assess the operational performance and profitability of the business during that specific timeframe, making it vital for evaluating trends, financial health, and overall business strategy.

In contrast, a Balance Sheet provides a snapshot of a company's assets, liabilities, and equity at a specific moment in time, thus not focusing on performance over a period. The Statement of Stockholders' or Owner's Equity details changes in the equity section of the balance sheet but does not address earnings and expenses directly. The Cash Flow Statement tracks the inflow and outflow of cash within the business, highlighting liquidity rather than profitability in terms of earnings and expenses over time.