What is the starting line item typically found in an income statement?

In an income statement, the starting line item is typically revenue, sometimes referred to as sales or top-line revenue. This figure represents the total amount of money generated from the sale of goods or services before any expenses are deducted. Revenue is crucial as it provides the foundation for the income statement, indicating the company's ability to generate income from its primary business activities.

Following revenue on the income statement, expenses such as cost of goods sold (COGS) are subtracted to arrive at gross profit, and then other operating expenses are deducted to derive operating income. This sequential breakdown provides investors and analysts with insights into how effectively a company is managing its resources and generating profit from its operations. Starting with revenue allows for a clear picture of the company's financial performance before accounting for operational costs and expenses.