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Hello class, the three-line items of the multi-step income statement are revenue, expenses, and net income/loss. It is important for a company to break down its income in this manner because it can offer a basic look at a company's revenue and expenses, making record-keeping easier for accountants and investors (Lessambo et al., 2018). Another major benefit of a multi-step income statement is the demonstration of gross profit. Gross profit equals sales for the period minus cost of goods sold (Lessambo et al., 2018). A multi-step income statement is important because it provides the company, investors, lenders, and other stakeholders deep insight into a companys financial performance during a period of time and its operating trends (Atukalp & M.E, 2023). Companies can also use the multi-step income statement and the balance sheet for financial ratios analysis. Businesses can benchmark performance with other companies in their industry to find comparables for their type of business (Atukalp & M.E, 2023). Lastly, the margin of safety is the amount of a companys profit after subtracting its break-even point. If companies use the multi-step income statement, accountants would be able to use the contribution margin to analyze the companys break even point and its margin of safety (Atukalp & M.E, 2023).

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