Reports
Profit & Loss and Balance Sheet
Reading the two core financial statements.
Profit & Loss
Income minus cost of goods sold gives Gross Profit; minus expenses gives Net Operating Income; plus other income and minus other expenses gives Net Income for the period.
Balance Sheet
Shows assets, liabilities and equity as of a date. Assets always equal liabilities plus equity. Net Income for the year to date appears in equity; prior years' profit rolls into Retained Earnings automatically at the start of each fiscal year.