Income Statement
|
Stock investors like to look at the income statement (a.k.a. "earnings statement" or "statement of operations") because it shows the company's "bottom line": its earnings, or profit.
Most of the income statement details the company's operations: the yellow zone back in the diagram.
Consolidated Financial Statements
Income Statement
(click on highlighted text for more information)
|
(dollar figures are in thousands)
|
2009
|
2003
|
|
Sales Revenue
|
Widget Sales
|
$ 12,347
|
$ 9,746
|
Services
|
6,912
|
5,688
|
Total Sales Revenue
|
19,259
|
15,434
|
|
Sales Costs
|
Widget Sales
|
5,649
|
4,688
|
Services
|
3,166
|
2,712
|
Total Sales Costs
|
8,815
|
7,400
|
|
Gross Profit
|
10,444
|
8,034
|
Gross Margin
|
54 %
|
52 %
|
|
Operating Expenses
|
Sales & Marketing
|
4,078
|
3,132
|
General & Administrative
|
916
|
705
|
Research & Development
|
2,364
|
1,831
|
Total Operating Expenses
|
7,358
|
5,668
|
|
Operating Income
|
3,086
|
2,366
|
Operating Margin
|
16 %
|
15 %
|
|
Interest Payments to Bondholders
|
147
|
253
|
Earnings Before Taxes
|
2,939
|
2,113
|
Provision for Taxes
|
1,028
|
739
|
Earnings ("net income")
|
1,911
|
1,374
|
Profit Margin
|
10 %
|
9 %
|
|
Dividends paid to Shareholders
|
10
|
-
|
Earnings available to Shareholders
|
1,901
|
1,374
|
Notes
This company is showing positive earnings.
In fact, if you compare the earnings between the two years shown, you'll find that earnings "grew" by 39%.
As you might expect, the figures for sales costs and operating expenses are also higher, so the company is probably growing physically as well: in order to make more money, it's increasing its capacity to produce more of whatever it sells.
One important thing that the income statement doesn't show is how the company is paying for this growth.
To find that, you need to look at the cash flow statement.
Another shortcoming of the income statement is that expense items are only shown "by department" and not "by type".
For example, employee salaries make up part of sales cost and part of all items listed under operating expenses; but you can't tell from here how big a part.
|
|
|
|
|
|