How to analyze an income statement in less than 2 minutes:

The income sheet is one of the three major financial statements.
It shows a company’s:
▪️Revenue (Sales)
▪️Expenditures (Costs / Expenses)
▪️Net Income (Earnings, Profits)
Over a period of time.

Management teams have leeway in categorizing their income statement.
This means that not all income statements look the same.
Here is a typical layout and the meaning of the most commonly used terms:

Income statement answers two big questions:
▪️ Is this company “profitable”?
▪️ Is this company growing or shrinking?
Here’s what I focus on first when looking at an income statement:
▪️1.Period: Quarter? Year?
▪️ 2.Revenue: Direction?
▪️3.Gross Profit: Direction?
▪️4.Earnings Per Share: Positive?
▪️5.Share Count: Direction?
▪️6.Operating Costs: Direction?

Best Possible Answers:
▪️1. Multiple Annual Periods
▪️2. Growing quickly
▪️3. Growing faster than revenue
▪️4.Growing faster than gross profit
▪️5. Declining
▪️6. Growing slower than revenue
Other areas I quickly glance at:
▪️Cost of Goods Sold: Direction?
▪️Non-Operating: Any big changes?
▪️Tax Rate: Stable?
▪️Basic + Diluted Shares: Big difference?

It's also very helpful to look at margins.
Simply divide each line item by sales.
I focus heavily on gross margin, operating margin, and net margin:

Income statements are most useful when measured over long periods of time.
Viewing $DG income statement over a decade shows how consistent it is.