You can evaluate business performance in terms of profitability by analysing which financial statement?

Question

Quizplus · Accepted Answer

The income statement provides information about a company's revenue, expenses, and net income or loss. It shows how much profit a company is making or if it is incurring losses. This makes it the appropriate financial statement to evaluate business performance in terms of profitability. The balance sheet provides information about a company's assets, liabilities, and equity at a particular point in time, while the cash flow statement shows how cash is coming in and going out of the business. While both these statements are important in evaluating a company's financial health, they do not directly indicate profitability.

You Can Evaluate Business Performance in Terms of Profitability by Analysing