Financial Statement Analysis Assignment Report

Financial
statement
Analysis

ACCOUNTING 1
Purpose of Income Statement
The main purpose of income statement is to shows the financial situation of the company
by representing the profit of the year. Income statement of the company shows the income and
expenses over a particular period of time. The main aim of the companies is to gain the profit
and the income statement is the statement which shows that company is making profit or not.
The representation of income and expenses reflects the firm’s financial situation over a specific
period of time (Woodruff, 2018).
(Source: Ford Motor Company, 2012)
An analyst has to examine the amount of sales to analyze that weather it is increases or
decreases because increasing or decreasing sales directly affects the net profit of the
organization. The other thing that an analyst has to examine is the expenses, either it is increases