Final answer:
The income statement provides information about a company's financial performance and helps stakeholders assess profitability and financial health.
Step-by-step explanation:
The income statement helps satisfy the objectives of financial reporting by providing information about a company's financial performance during a specific period. It shows the revenue earned, expenses incurred, and the resulting net income or loss. The income statement helps stakeholders, such as investors and creditors, assess the profitability and financial health of a company.
For example, if a company's income statement shows consistently increasing revenue and net income over time, it indicates that the company is growing and generating profits. On the other hand, if the income statement shows declining or negative net income, it may raise concerns about the company's financial stability.
Overall, the income statement, along with other financial statements such as the balance sheet and cash flow statement, provides a comprehensive view of a company's financial performance and helps satisfy the objectives of financial reporting by promoting transparency and accountability.