Which document helps determine if a business has been profitable over the last financial year?

The income and expense sheet is pivotal in assessing a business's profitability over a specific financial year. This document lists all the revenues generated and expenses incurred during that period, allowing for a clear calculation of net profit or loss. By reviewing this sheet, stakeholders can understand how much money the business made versus how much it spent, resulting in insights on operational efficiency and overall financial health.

The balance sheet, while valuable for showing the company's assets, liabilities, and equity at a given point in time, does not indicate profitability over a period. The cash flow statement tracks the flow of cash in and out of the business, providing insights into liquidity rather than direct profitability. Similarly, the statement of changes in equity details how equity components have changed but does not provide information on revenue and expenses. Therefore, the income and expense sheet is the most direct source for evaluating profitability over the last financial year.