Chapter 7
Using the Income Statement
IN THIS CHAPTER
Getting acquainted with the income statement
Considering different types of revenue
Determining a company's expenses
Analyzing a company's finances using profits and losses
Figuring out earnings per share
Every business person needs to know how well his business has done over the past month, quarter, or year. Without that information, he has no idea where his business has come from and where it may go next. Even a small business that has no obligation to report to the public is sure to do income statements on at least a quarterly or (more likely) monthly basis to find out whether the business made a profit or took a loss.
The income statement you see in public financial statements is likely very different from the one you see if you work for the company. The primary difference is the detail in certain line items.
In this chapter, ...
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