How to Read an Income Statement
Read top to bottom: revenue minus costs at each step, ending in net income — the company's profit over a period.
What it is
The income statement (also called the profit-and-loss or P&L statement) shows how much a company earned and spent over a period of time, usually a quarter or a year. It starts with revenue at the top and subtracts costs in stages until it reaches net income at the bottom. Unlike the balance sheet, it covers a span of time, not a single moment.
Why it matters
It tells you whether a business actually makes money and where its profit leaks away. Reading it well lets you separate a company that grows sales but loses money from one that turns sales into real profit.
How it's calculated
Read it in order: (1) Revenue (sales) at the top; (2) subtract cost of goods sold (COGS) to get gross profit; (3) subtract operating expenses (such as research, sales, and admin) to get operating income; (4) subtract interest and taxes to get net income. At each line ask what percentage of revenue is left — those are the margins. Compare the same line across several years to see the trend, and check whether revenue growth is keeping pace with cost growth.
How Quintarthai uses it
The company deep-analysis pages show a 10-year income statement on the Financials tab, with margins computed for you and trends Quinn can summarize.