When we do business, income is the first thing we look at. A company cannot survive without income. An Income Statement is a financial statement that covers a specific period. It is normally for 3 months or for a year. I have often heard someone said that the company made a lot of money. But when I asked him what was the earnings per share (EPS), he was not able to tell me that. This means that the person did not know about earnings. Earnings must always be looked at as EPS which is net earnings divided by the number of shares issued.
An Income Statement (IS) is also known as a Profit & Loss Statement or a Statement of Revenue or Expense. They are all the same.
An IS is divided into 2 parts, namely the operating and non-operating activities. The operating activities discloses information about revenues and expenses that are a direct result of the regular business operations.
The non-operating activities disclose revenue and expense information about activities that are not tied directly to a company's regular operations. For example, if a textile company sold a factory or some old plant equipment, then this information would be in the non-operating items section.
Ideally, revenue and EPS must go up in tandem. So when you look at EPS, don't forget to look at revenue as well.