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Table of Contents for Investing Lesson 4

Investing Lesson 4 - Analyzing an Income Statement


Understanding the Income Statement and Profit and Loss Statement

The income statement is a scorecard that shows you how much money a business made or lost over a period of time. New investors, business owners, and managers need to understand how to read an income statement and which numbers are most important.

Whether you are buying your first stock, running a small business, working as a manager, or studying business in college, one of the basic skills you need is the ability to read an income statement. This lesson was put together to go through a typical income statement line-by-line and explain, in plain English, what everything means and why it should be important to you.

The table of contents below can help you navigate effortlessly - we've kept each topic on its own page to make learning even easier. Grab a cup of coffee, and start reading through these pages. Please note, these lessons have been designed to be read sequentially! You should start at the beginning and work your way through, page by page, to learn the most.

How to Read an Income Statement Table of Contents
1. Introduction to Income Statement Analysis
2. Sample Income Statement
3. Revenue and Sales on the Income Statement
4. Cost of Goods Sold
5. Gross Profit
6. Calculating Gross Profit Margin
7. Analyzing the First Three Lines of the Income Statement
8. Operating Expenses
9. Research and Development Costs (R&D)
10. Selling, General, and Administrative Expense - SGA Expenses
11. Goodwill and Amortization Expense
12. Extraordinary Events
13. Accounting for Extraordinary and Non-Recurring Events
14. Calculating Operating Income and Operating Margin
15. Interest Income and Expense
16. Interest Coverage Ratio
17. Depreciation Expense
18. Accumulated Depreciation
19. Straight Line Depreciation
20. Sum of the Years Digits and Accelerated Depreciation Methods
21. Double Declining Balance Depreciation Method
22. Comparing Depreciation Methods
24. Income Taxes
25. Accounting for Minority Interest on the Income Statement
26. Unreported or Look-Through Earnings
27. Continuing Operations vs. Discontinued Operations
28. Accounting Changes
29. Preferred Dividends on the Income Statement
30. Net Income Applicable to Common Stock
31. Calculating Net Profit Margin
32. Basic EPS vs. Diluted EPS
33. Hiding Share Dilution
34. Share Repurchases
35. Return on Equity - ROE
36. Asset Turnover
37. Return on Assets - ROA
38. Projecting Earnings
39. Formulas and Calculations
40. Putting It All Together
41. Sample Real World Income Statement Analysis - Abercrombie & Fitch
42. Sample Income Statement Analysis - Brown Safety Company

Test your knowledge after you've read this lesson by taking the income statement quiz.

After You've Learned to Read an Income Statement, You May Find These Interesting

Other Investing You May Find Interesting
Investing Lesson 1 - Intro to the Stock Market
Investing Lesson 2 - How Stock Prices Are Determined
Investing Lesson 3 - Analyzing a Balance Sheet
Investing Lesson 4 - Analyzing an Income Statement

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