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What is an income statement?

An income statement measures how much money the company generates in the form of revenue and sales, and then how much actually turns into profit after subtracting cost of goods sold and operating expenses. Below is a very summarized income statement that illustrates the key components of any income statement. The goal is to maximize net income! Remember, the income statement is over a period of time while the balance sheet is a snapshot at a point in time.

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