What does an income statement reveal about a business?

An income statement, also known as a profit and loss statement, provides a comprehensive overview of a company's financial performance over a specific period, typically a fiscal year or quarter. It reveals the amount of profit or loss generated during that timeframe by detailing revenues and expenses. This statement shows how much money a business earned from its operations (revenues) and how much it spent to generate those earnings (expenses). The resulting figure, whether a profit or a loss, is crucial for stakeholders, as it indicates the company's ability to generate profit from its operations, thereby influencing investment decisions, lending opportunities, and operational strategies.

In contrast, the other options relate to different aspects of a company’s financial health or organizational structure. For instance, total assets and liabilities reflect the company's balance sheet, while employee lists and their salaries pertain to payroll information and human resources, and market position addresses competitive analysis, none of which are detailed in an income statement.