Income Statement (Profit and Loss) – A key yearly financial statement of a company's performance held by the Government for anyone to see

(Pronounced in-kuhm steyt-muhnt)

To remember what income statement means use the following mnemonic:

All my incoming money and outgoings for the year were stated on the form, but it meant (income statement) that I didn't make much money, it was a poor company performance.

All my incoming money and outgoings for the year were stated on the form, but it meant (income statement) that I didn't make much money.

Any limited company that has finished a year’s worth of trading must submit an income statement (also known as a profit and loss statement or P&L statement) to the government within the following 9 months. This income statement must be set out in a set format (see below).

This held information is used by credit rating companies to assess your performance and rate your company with a score from 0 (bankrupt) to 100 (no chance of going bankrupt).

Banks and loan companies use income statements to decide if you are worth loaning money to. If you have a very high credit rating score you will also be charged lower rates of interest because you are a lower risk of defaulting on repayments. Company income statements are open to the public, and anyone can view them online.

The first figure displayed on this statement is always the turnover, as seen below:

Note: Brackets mean a negative figure.