Why income statement is important?

Unlike  a balance sheet, which communicates information about a point in time, the income statement relate to a period of time.The income statement summaries certain transactions that take place during that period. The regular production of an income statement allows managers to compare actual performance against the budget.This is important as it enables managers to identify any problem areas and implement remedial action.Clearly, the income statement is very important because it tells you whether a business is profitable or not.

So that we can see that in which direction our business is going.

The income statement is important because it shows the profitability of a company during the time interval specified in its heading.

It is important as it is a measure of the profitability of a business entity. It measures the rate at which the organisation is selling its commodities and the impact of direct and indirect costs on gross profit.

The income statement is important because it shows the profitability of a company during the time interval specified in its heading. The period of time that the statement covers is chosen by the business and will vary.