Which financial statement shows a company's profitability over a specific period?

The income statement is specifically designed to showcase a company's profitability over a defined time period, typically a quarter or a year. It summarizes revenues, expenses, and profits or losses incurred during that time, allowing stakeholders to assess the company's operational performance. The structure of the income statement leads to critical metrics like gross profit, operating income, and net income, which are vital for evaluating how efficiently the company generates profit relative to its revenues.

In contrast, the balance sheet provides a snapshot of a company's financial position at a specific moment in time, listing assets, liabilities, and shareholders' equity, but it does not measure profitability over time. The statement of cash flows presents the inflows and outflows of cash during a period, focusing on cash management rather than profitability. Lastly, the statement of shareholders' equity outlines changes in equity accounts over time but does not directly reflect the company’s profitability. Therefore, the income statement is the only financial statement that directly addresses profitability over a specific period.