From 11:00PM PDT on Friday, July 1 until 5:00AM PDT on Saturday, July 2, the Shmoop engineering elves will be making tweaks and improvements to the site. That means Shmoop will be unavailable for use during that time. Thanks for your patience!
We have changed our privacy policy. In addition, we use cookies on our website for various purposes. By continuing on our website, you consent to our use of cookies. You can learn about our practices by reading our privacy policy.
© 2016 Shmoop University, Inc. All rights reserved.

Finance Glossary

Just call us Bond. Amortized bond.

Over 700 finance terms, Shmooped to perfection.

Income Statement

Definition:

The infamous P&L or profit and loss statement.

This statement is supposed to show a company's revenues, expenses, and earnings. The idea is that it's supposed to be a clear-cut set of numbers that shows what's coming in and what's heading out. Is the company making money? Is it bleeding cash?

The reality is that accountants can do all kinds of fun accounting stuff to fudge the numbers and hide what's really going on, so those black-and-white numbers don't always tell the full story.

In cases like Enron, WorldCom, and other financial disasters, income statements are telling a mostly fictional story.