The primary goal of profit and loss statements is to determine what?

The primary goal of profit and loss statements is to determine net income. A profit and loss statement, also known as an income statement, provides a summary of a company's revenues and expenses over a specific period, ultimately yielding the net income or profit. This figure is crucial for assessing the financial performance of a business, as it indicates how much money the company has earned or lost after accounting for all costs associated with generating revenue.

While total revenue, operating expenses, and cash flow are all important components of financial analysis, they are not the primary focus of the profit and loss statement. Total revenue represents the total income generated before expenses are deducted, operating expenses detail the costs of running the business, and cash flow measures the cash moving in and out of the business. The net income is the crucial outcome derived from taking total revenue and subtracting operating expenses, taxes, and other costs, thus making it the central goal of this statement.