How does the income statement summarize a company's performance?

The income statement summarizes a company's performance by showing income and expenses over a period of time. This financial statement provides insight into a company's profitability by detailing how much money was earned (revenues) as well as the costs incurred in generating that income (expenses). The difference between total income and total expenses results in the net income or loss for the period, which is a crucial indicator of a company’s financial health.

By focusing on the flow of income and expenses, the income statement allows stakeholders to assess how well the company is performing operationally. It highlights the effectiveness of management in generating profits relative to the expenses incurred. This summary is essential for investors, management, and analysts as it provides a clear view of the business’s operational results.

In contrast, other options are less relevant because they either focus on specific aspects of financial reporting, such as assets or expenses alone, or do not encapsulate the comprehensive nature of the income statement's role in conveying overall performance.