Which financial statement would you consult to assess a company's profitability?

The Income Statement is the financial statement that provides a clear picture of a company's profitability over a specific period. It includes key components such as revenues, expenses, and net income. By summarizing the revenues earned and the costs incurred, the Income Statement directly illustrates whether the company is generating a profit or incurring a loss during that timeframe.

This financial statement is critical for stakeholders, including investors and management, as it helps assess operational efficiency and effectiveness in generating profits. Since profit is a primary indicator of a company's health and performance, analyzing the Income Statement allows for evaluating trends in profitability over time and making informed decisions based on that information. While the other financial statements provide valuable insights into cash flows, assets, liabilities, and retained earnings, they do not specifically focus on the aspect of profitability in the same straightforward manner as the Income Statement.