Which financial statement reports a company's profitability during an accounting period?

The income statement is the financial statement that specifically reports a company’s profitability over a defined accounting period. It summarizes the revenues generated and the expenses incurred during that timeframe, resulting in a net income or net loss. This statement provides key insights into the company’s operational performance, allowing stakeholders to assess how effectively the company is generating profit from its operations.

In contrast, the balance sheet presents a snapshot of the company's financial position at a specific point in time, detailing assets, liabilities, and stockholders' equity. The statement of cash flows focuses on the cash inflows and outflows over a period, highlighting how well the company generates cash to meet its obligations. The statement of stockholders' equity outlines changes in equity, such as transactions with shareholders, but does not capture profitability directly.

By concentrating on revenues and expenses, the income statement serves as a vital tool for evaluating the company's financial health and operational success during a particular accounting period.