What does an income statement primarily provide?

An income statement primarily provides a summary of revenues and expenses, leading to the calculation of net income or loss for a given period. The income statement is often referred to as the profit and loss statement, and it reflects the company's financial performance over a specific timeframe, such as a quarter or a year. By detailing revenues earned from sales, services, or other sources, alongside the expenses incurred in generating those revenues, the income statement allows stakeholders to assess how effectively a company is managing its resources and operations.

This format is crucial for understanding the profitability and operational efficiency of the business. The difference between total revenues and total expenses at the end of the income statement highlights whether the company has generated a profit or incurred a loss during that period. Thus, the focus on revenues and expenses is essential for investors, management, and other users of financial statements in making informed decisions.

The other options don't accurately capture the primary role of the income statement. For instance, while cash flows are important for understanding liquidity, they are detailed in the cash flow statement. A balance sheet presents assets, liabilities, and equity at a specific point in time rather than over a period, and future projections would typically appear in budgets or forecasts, not in the income statement itself.