Understanding Corporate Income Statements

                  

I repeat: Most investors never bother to read a corporate prospectus. That’s one of the reasons why I suggest they don’t buy individual stocks, but that they instead employ low-cost mutual funds that invest in indexes.

                       

But in the event that they do buy individual issues, another of the items to review on a 10-K would be the come Statement; a report of sales, expenses and profits.

                       

Ideally, you want to see a trend of rising sales and earnings. The 10-K shows three years of results, and a a five-year summary. Look for the trend in net earnings.(See the Earl J. Weinreb NewsHole® comments and @BusinessNewshole at Twitter.)