Companies are required to report a statement of comprehensive income, either as a single financial statement or as an income statement plus a statement of comprehensive income that begins with net income from the income statement. Most companies choose two statements.
An income statement may also be called a statement of operations or a profit and loss statement. It provides information about a company’s business activities over a certain period of time. This includes the revenue and other income the company produced during that time, as well as the expenses required to generate that revenue.
Revenue, or sales, is what the company charges customers in return for providing goods or services. Expenses are the outflows such as the cost of sales, administrative expenses, interest on debt, and income taxes. Net income is revenue less all expenses. Other income includes money generated from non-operating activities such as the sale of a business line. Apple’s 2020 income statement is presented below.

Apple’s revenue from product sales has been fluctuating around $220 billion for the last three years, while revenue from services has been increasing steadily. The cost of sales has also been rising, resulting in modest growth in gross profit. Operating expenses have also risen, with the operating profit in 2020 being higher than the 2019 figure but below 2018’s. This relationship continues to hold after taxes. Earnings per share (EPS) are presented both on a “basic” and a “diluted” basis. Basic EPS are calculated on the actual average number of shares outstanding during the period. Diluted EPS represents the number of shares that would have been outstanding if all securities such as convertible bonds and employee stock options had been converted into shares.
Questions an analyst might have after reviewing Apple’s income statements include:
- What are the drivers of product and services revenues? Where might they go in the future?
- Why are operating expenses growing at a faster rate than revenues?
- Why is the tax rate declining? Will this pattern reverse?
Comprehensive income includes all other transactions that affect owners’ equity other than actual transactions with shareholders. Some of these are reflected on the income statement itself, while others are reported as “other comprehensive income.” Apple’s statement of comprehensive income is included below.

Apple’s sources of other comprehensive income include foreign currency translation and unrealized gains and losses on derivative instruments and marketable debt securities. Over the three year period, their effect on net income has been relatively minor – reducing it by about $3 million in 2018, adding a similar amount in 2019, and having little impact in 2020.
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