What essential financial statement shows a company’s revenues and expenses over a specific period?

The income statement is the essential financial statement that shows a company’s revenues and expenses over a specific period, typically a month, quarter, or year. It reflects the company's performance during that time frame by detailing how much money was earned (revenues) and how much was spent (expenses). The resulting figure, known as net income or net loss, indicates how well the company has conducted its business operations in terms of profitability.

This statement is crucial for contractors and businesses alike as it helps stakeholders understand the financial health of the company, assess its operational efficiency, and gauge its ability to generate profit. It serves as a key tool for decision-making, both for internal management and external investors or lenders.

In contrast, the balance sheet provides a snapshot of a company's financial position at a single point in time, listing assets, liabilities, and equity. The statement of cash flows details how cash is being generated and spent over time, providing insight into liquidity but not profitability. The equity statement focuses on the changes in the ownership equity over a period but does not detail income and expenses directly.