Which of the following is NOT a component evaluated by an income statement?

The income statement primarily serves to provide information about the revenues and expenses of a business over a specific period, allowing users to assess the company’s profitability and operational performance. Among the options provided, the evaluation of liabilities is not directly reflected in the income statement.

Past performance is assessed through the historical revenues and expenses reported, giving insight into how well the company has performed in the past. Future cash flow predictions can be related to the profits reported on the income statement, as they often depend on current and anticipated revenues. Risk assessment for future performance involves analyzing factors that may affect the company’s income and expenses, which also ties back to the information within the income statement framework.

In contrast, the assessment of liabilities falls under the balance sheet rather than the income statement. The balance sheet provides a snapshot of what a company owes versus what it owns at a specific point in time, which is critical for understanding financial health but is distinctly separate from the income statement’s focus on operational performance over time. This is why the evaluation of liabilities is identified as the component not evaluated by an income statement.