These are the exercises to go along with Chapter V, on the income statement:
- Find the income statement for the company you are interested in.
- Is revenue increasing consistently? What about gross profit?
- 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?
- 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?
- 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?
- 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 buttons, as seen below. Toggle between the quarterly, yearly, and quarter vs. quarter statements using the pull down menu, called out below.
Tip: In the Statements tab, selecting the ‘Include Chart Column’ will give you a very quick glance at the overall trend for the metric, as shown below.
Alternatively, to find just the sales trend, users can also open the EPS tab for a chart of Sales and EPS, like this:
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.
Insight panel, Summary tab:The Debt/Equity ratio can also be found in the Summary tab of the Insight panel, under the “Financial Health” section, shown below.
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