Know Your Breakeven and How to Use It

An income statement tells your leadership and investors whether your company has made or lost money and helps you understand your breakeven point so you can operate profitably. It shows how your revenue – the top line money you have taken in from products/services before expenses are deducted – becomes your net income or bottom line after revenue and expenses have been considered. Across a specific period of time, an income statement outlines the cost and expenses charged against your revenues, depreciation and amortization of your assets, and taxes.

This important financial tool is also known as a profit and loss statement (P&L), statement of financial performance or an earnings or operating statement.