Reading Corporate Income Statements

I repeat what I often say: 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, another of the items to review on a 10-K would be the  Income 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.)