SIE (Securities Industry Essentials) Practice Exam

Which financial statement lists operating profit?

1. Balance sheet

2. Income statement

3. Cash flow statement

4. Statement of retained earnings

The correct answer is: Income statement

The income statement is the financial statement which lists operating profit. This statement provides a detailed breakdown of a company's revenues, expenses, and profits or losses over a specific period of time. The balance sheet, on the other hand, shows a company's assets, liabilities, and equity at a specific point in time. The cash flow statement reports the flow of cash in and out of a company during the reporting period. The statement of retained earnings shows changes in a company's retained earnings balance over time. Therefore, the income statement is the only financial statement that specifically lists operating profit.