As the question states.
You are to assume the role of a business owner. You have to prepare an Income Statement, that shows the Revenue your business makes, and the Expenses.
Your revenue would be were your sales are generated; if you own a restaurant, then it would be the sale of food, and alcohol.
The expense might be, electricity, water, wages etc.
Your analysis is to provide feedback, or suggestion on how you can increase your revenue.
In your income statement. you can show either a profit, or loss.
Regardless, in your analysis you must show how you can increase your profits/decrease expenses.
Hope that answers your question.