The income-statement approach to profitability does not incorporate any evaluation of the investment in assets required to generate the net profit or profit contribution.

Question

Quizplus · Accepted Answer

The income-statement approach focuses solely on the revenue and expenses of a period and does not take into account the investment in assets required to generate that profit. It is a short-term view of profitability.

The Income-Statement Approach to Profitability Does Not Incorporate Any Evaluation