Which financial statement shows a company's profitability over a specific period?

The income statement is the financial statement that explicitly shows a company's profitability over a specific period, such as a quarter or a year. This statement details revenues, expenses, and ultimately calculates the net income or loss for that time frame. It provides a clear view of how much money the company earned compared to how much it spent, allowing stakeholders to assess the company's operational performance.

The balance sheet, while important, provides a snapshot of a company's financial position at a single point in time, detailing assets, liabilities, and equity, but it does not capture performance over a period. The cash flow statement focuses on the inflows and outflows of cash, showing how well the company manages its cash position in relation to its ongoing business activities and financial obligations, rather than its profitability. The equity statement, which reflects changes in the company's equity over a period, does not directly measure profitability but instead tracks equity transactions and adjustments.

The income statement is essential for investors and management to understand how effectively the company is turning revenues into profits.