Mapping Earnings: Finding the Bottom Line in Profits  Step 1:
What Can I Determine About a Company From the Income Sheet?
Mapping Earnings: Finding The Bottom Line In Profits Splash
image  The income statement reports on one of the most critical
company figures—its earnings per share. Over the long run, a
stock's value is dependent upon its earnings potential.
Investors closely monitor earnings announcements. Stock price
can nose dive when earnings expectations are missed by even a
few pennies. Therefore, it is important to be able to read and
understand an income statement and identify trends of key items
that impact earnings.  Classroom Steps  The goal of the income
statement is to determine revenue for the period that it covers
and then match the corresponding expenses to the revenue. The
income statement, sometimes referred to as the statement of
earnings or statement of operations, presents a picture of a
company's profitability over the entire period of time covered.
This is in contrast to the balance