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Income statement reports the revenue, expenses, and profit (or loss) for a company over a specific interval of time. Understanding income statement can help you in stock investing. The most important thing to look for is Net Income, which is the difference between total revenue and total expense during a period. Increasing Net Income is what we look for. Also checks for increasing sales, and decreasing expense.
Another important number is the Earning Per Share (EPS) or how much earning which represents a stock. Increasing EPS is also good, but you must also watch out for outstanding stock. The number of outstanding stock can give you false impression of EPS. So you should cross check with Net Income. Look for growing EPS and Net Income.
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