What is the purpose of an operating statement?

The primary function of an operating statement is to summarize a property's actual income and expenses over a specific period, typically a year. This document provides valuable financial insight, enabling property owners, investors, and managers to understand how well a property is performing financially.

Operating statements detail various income sources such as rents, additional fees, and other revenue, while also outlining all operating costs, including maintenance, utilities, and management fees. By reviewing this information, stakeholders can assess the property’s profitability and operational efficiency, which is crucial for ongoing management and investment decisions.

Other options focus on aspects that are generally not the core purpose of an operating statement. While forecasting future income and expenses may be beneficial, it typically falls under budgeting or financial planning rather than summarization of past performance. Rental comparisons would involve market analysis which is different from summarizing actual performance figures, and estimating potential profits from new investments pertains to investment analysis rather than to the operational history of an existing property. This clear distinction highlights why summarizing actual income and expenses is central to the role of an operating statement.