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

The income statement is the financial statement that primarily showcases a company's profitability over a specific period. It details the revenues earned and the expenses incurred during that period, allowing stakeholders to gauge the company's performance in generating profit. By subtracting total expenses from total revenues, the income statement reveals the net income, which is a key indicator of profitability.

This statement is fundamental for assessing operational efficiency and guiding investment decisions, as it directly reflects the financial results of a company’s activities. Investors, management, and analysts use this information to understand how effectively the company is managing its resources to produce profit and to project future performance trends.

In contrast, the balance sheet presents a snapshot of a company's financial position at a given point in time, detailing assets, liabilities, and equity, but does not account for profitability over a period. The cash flow statement monitors the inflow and outflow of cash, highlighting liquidity rather than profitability. Lastly, the equity statement, which reflects changes in equity accounts, provides insights into ownership stakes and retained earnings but does not indicate profitability.