The income statement which some refer to as a profit and loss statement summarizes a company's revenues (sales) and expenses for the time period stated in its heading. An income statement recognizes revenues when they are realized or when the service is rendered and is designed to measure past profitability.

Basically the information found on a business Income Statement is revenue, expense, and profit / loss.

Revenue can be defined as the total income that an organization receives. The revenue is generally further broken down into sub-categories or displayed on different lines based on whether the income was derived from normal business operations or not.

Expense can be defined on an income statement simply as the businesses' trade of value or money from the business to a different entity. Just as revenue, expenses are similarly categorized on an Income Statement. For example, Cost of Goods Sold should only reflect the direct cost or expense of producing the businesses' product or service, while your administrative costs would be on a different line.

1.Microsoft Excel can be setup to provide the data for these statements.

2.Calc is a free Excel-like product from OpenOffice that can be configured to provide the data to prepare these statements.

3.Quickbooks is a popular Small Business accounting program that can be used to provide these statements.

By using the information provided by the Income Statement you will be able to conclude whether the company is profitable or not (more value coming into your business than going out) however you will need to utilize the cash flow statement and balance sheet to provide an accurate depiction of the company's health.