The Statement of Earnings
The Statement of Earnings, also referred to as the Statement of Income, shows the source and amount of the corporation's income. At the top, the total expenses are subtracted from the total revenues to calculate the "Earnings from Operations" or "Operating Income". Below this figure is commonly a list of other income/expenses including income tax. These items will vary from report to report, and specifics can be found in the "Notes to Consolidated Financial Statements" that come after the statements.
Losses are noted by parentheses around the number. An example is "addition (reduction) of long term debt". These parentheses signify money paid out from the company. They are subtracted when calculating totals.
Some reports will include the "unrealized gain/loss on securities." This indicates the status of the corporation's invested stock that has not been withdrawn from the market. The figure is typically found in the "Other income/expenses" section. Depending on how the market is doing, some corporations will not include a loss in the Statement of Income.
The net income is found at the bottom of the statement after income tax has been subtracted. This is the profit made by the company in the given year, and serves as the best indicator of how the corporation is doing. Below it is the "net income per share", signifying the value of the stock. This is calculated based on the weighted average number of common shares distributed. In most reports, these statistics are shown for the previous two or three years so that shareholders can see changing trends.
Below is a sample Statement of Earnings: