A company's financial statement gives you insight into its business operations and financial performance. There are four main financial statements: Income statements, balance sheets, cash flow statements, and statements of shareholders' equity. Each one tells you something different about a business, but they give a great overall picture of a company's financial health when used together. Let's look at three of the top numbers you should know on financial statements and what they mean.Net income (or net earnings) is calculated by taking a company's sales and subtracting the cost of goods sold (COGS), taxes, interest, operating expenses, administrative expenses, depreciation, and any other expenses. Ideally, you want this number to be positive because that means the company is bringing in more revenue than it's paying out in expenses.Net income is sometimes referred to as a company's bottom line because it's found at the bottom of its income statement. It's important to know a company's net income because it shows profitability, but it's also important to calculate other figures, such as earnings per share (EPS). A company's EPS shows how much profit it made per outstanding share. If their net income is $1 million and they have 100,000 outstanding shares, their EPS is $10.Continue readingWeiter zum vollständigen Artikel bei "MotleyFool"