The income statement
The income statement shows what came in and what it cost over a period, and what is left: the profit.
The shape
Sales (also called revenue) at the top. Costs below: what was bought, rent, wages, interest, tax. Profit at the bottom. That is why profit is called "the bottom line".
The café's year
The café sold €200,000 of coffee and cake. Everything it cost came to €180,000. Profit: €20,000.
The margin
The margin is the share of each sale that is left as profit. €20,000 of profit on €200,000 of sales is a 10% margin: 10 cents kept from every euro sold.
Profit is not cash
A sale counts when it is made, even if the customer pays next month. A big purchase, like a €10,000 oven that will last 5 years, is counted as €2,000 a year instead of all at once. So profit and cash can be very different.
What to look for
Are sales growing? Are costs growing faster than sales? Is the margin getting thinner? A company can sell more and still earn less.