Compare the income statement to a video. It measures a firm’s profitability over a period of time. The firm can choose the length of its reporting time period, such as a month, a quarter or a year. The income statement shows gross income, revenues, expenses and net income. It is important to recognize that an income statement includes both cash items, such as cash sales as income, and non-cash items, such as credit card sales as income, and depreciation as expense. An income statement is often called a profit/loss or P&L statement.