What is an income statement?

An income statement is indeed a financial report that summarizes a company's revenues and expenses over a specific period, culminating in net profit or loss. This statement is crucial for understanding a company's financial performance, as it provides a detailed account of how much money was made (revenues) and how much was spent (expenses) during that period.

The income statement typically includes key figures such as gross income, operating income, and net income, offering insights into various levels of profitability. Investors and analysts use the income statement to assess the efficiency of a company in generating profit relative to its costs and to evaluate trends in financial performance over successive periods.

The other options describe different financial documents or concepts. For example, one pertains to the balance sheet, which focuses on a company's assets and liabilities at a single point in time, while another addresses cash flow statements that detail cash movements. Lastly, a business plan's projection of future profits and expenses doesn't provide a historical financial overview as the income statement does. This context reinforces why the first option is the most accurate definition of an income statement.