Appendix V: Income Statement

Introduction to Fundamental Stock Research

These are the exercises to go along with Chapter V, on the income statement:

  1. Find the income statement for the company you are interested in.
  2. Is revenue increasing consistently? What about gross profit?
  3. Are revenue (top line) and net income (bottom line) following the same trend? Is one changing faster than the other? If so, what do you think this could mean?
  4. Compare quarterly and yearly statements. Is the EPS growing year over year (YoY)? Quarter over quarter (QoQ)? Do you notice any seasonal cyclicality within the quarterly EPS trends?
  5. If your company has long term debt, compare interest expense and operating income. What percentage of the operating income is needed for interest expense? Does this percentage seem manageable? Has it improved over time?
  6. How does the interest expense compare to the debt/equity ratio?

Here is where you can find all the information you need to complete the exercises.

 

Find a Company’s Income Statement

Once you have selected a stock, you will notice that it loads in the table and the Insight panel (on the right hand side of your SR screen). Navigate to the “Statements” tab and find the income statement among the accordion menus, as below. Toggle between the quarterly and yearly statements using the Q/Y buttons, called out below.

income statement

Tip: In the Statements tab, mousing over the graph icon will give you a very quick glance at the overall trend for the metric, as shown below.

income statement

Alternatively, to find just the sales trend, Premium users can also open the Detail tab for a chart of Sales and EPS, like this:

balance sheet

Find the Debt/Equity Ratio

This ratio can be found in multiple places.

Table: The easiest way to find the Debt/Equity ratio is in the Table. Open the “Balance Sheet” View and by default the column should be present. Or, use the ‘Add Column’ feature to add it to any view.

sd column

Insight panel, Detail tab: If you have a Premium membership to Stock Rover, the Debt/Equity ratio can also be found in the Detail tab of the Insight panel, under the “Financial Health” section, shown below.

detail tab

For more information on using Stock Rover, see our Help pages or email our Support Team.