What is a multi-step income statement?

A multi step income statement is a detailed financial statement which divides the revenues, expenses and profits of the company in different sections. It separates income into operational and non-operational activities for businesses to determine the core proficiency of business. The most important sections include gross profit (revenues less cost of goods sold), operating income (gross profit less operating expense), and net income (final profit reduced by items not directly related to operating and taxed income). It offers a more lucid image of financial performance for the benefit of businesses, investors as well as stakeholders to realize profitability and overall efficiency.