1) Income from Continuing Operations (before tax & after tax): includes operating, non-operating, & income tax
2) Income from Discontinued Operations (after tax)
3) Extraordinary Items (after tax)
Statement of Retained Earnings
4) Cumulative effect of Change in Accounting Principle (after tax)
We need the income statement to tell us (1) how the company's funds are use and (2) what money is actually coming into the company because of how we spend our funds. It helps us determine the profitability, performance, and the value of the company.
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