Income Statement Analysis

The income statement, or P&L (profit and loss), is one of the most important financial reports you need to understand, and serves as a scorecard that lets you know how a business is doing. Learn how to read these important documents, and you'll have a leg up on the average investor.

Depreciation and Amortization on the Income Statement

The next topic we're going to discuss is depreciation and amortization on the income statement. Depending upon the type of business you are analyzing... read more

Double Declining Balance Depreciation Method

With the straight line depreciation method and ?the sum of the years' digits depreciation method out of the way, it is now time to turn our attention to another ... read more

How to Calculate Gross Profit Margin

Although we are only a few lines into the income statement, we can already calculate the gross profit margin, our first financial ratio. At its core... read more

Return on Equity (ROE) Is Key When Analyzing Financial Statements

One of the most important profitability metrics is a return on equity, or ROE for short. Return on equity reveals how much after-tax profit a company earned in comparison ... read more

Income Before Tax on Statements

With EBITDA out of the way, now it's time to turn our attention to one of the most important lines on the income statement, which is income before tax. What is income .... read more

Straight Line Depreciation Method

The simplest and most commonly used depreciation method when calculating depreciation expense on the income statement is known as the straight line depreciation method ... read more