The income statement is one of the primary source of financial information to the external users such as tax authorities, banks auditors and by the stock exchanges if the company is a public company listed in the stock exchange. In addition Income statement is a vital financial information to manage the business to maximize shareholders information with other non-financial information and for budgeting purposes.

The complexity of the Income statement depends on the size of business, its business operations and whether it deals with goods or services or both. However, the Income statement of all business have some common information such as earnings, expenses, gross profit and net profit and notes to accounts to inform the users of income statement to disclose the accounting policies, any abnormal incomes for the period and losses for a given period. The income statement for Big business can be divided in to separate business units or product line basis depending on the need of the business and the purpose of the income statement. In addition, Income statents have to be audited by independent external auditors if these companies or business are public companies listed in the stock exchanges and also have to prepared monthly or quarterly depending on the stock exchange regulatory requirements. As well, as mentioned above the Income statement enables the tax authorities to estimate tax liabilities. The format and the length of the income statement is dependent on the size of the enterpprise, its complexity of operations, whether it deals with goods or services and as well whehter it is a private or public company, partenership, or a small business operation.

In conclusion, Income statement is an important financial information to external users and to internal users to make sound decisions in the allocation of resources to maximize shareholders wealth as well as to make the financial markets to work efficiently as possible there fore make the stock markets are transparent as possible. As well, it enable the investors to make informed decisions and to enable the economic system of the free market meet the macro economic objectives of the economy as a whole.

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