Ask a Fool: What Is an Income Statement?

Worldwide Invest Better Day 9/25/2012

In the spirit of better investing and in celebration of the first Worldwide Invest Better Day coming up on Sept. 25, Motley Fool analysts will be answering user- and reader-submitted questions leading up to the big event. "Ask a Fool" anything, and we'll do our best to help you invest better.

In the following video, Fool.com analyst Anand Chokkavelu explains that an income statement is one of the financial statements that investors look at, detailing everything from a company's sales all the way down to its earnings. Comparing income statements across industries, Anand warns that you have to be careful which figures you zero in on, as some will differ wildly depending on the industry. For example, retailers and restaurants have much lower margins than tech providers, which is one of the first things you'll notice if comparing the income statements of companies such as McDonald's (NYSE: MCD  ) and Cisco (NASDAQ: CSCO  ) . Watch the following video to learn more, and be sure you're interpreting income statements correctly.

Click the big green button to join the thousands of people celebrating Worldwide Invest Better Day on Sept. 25!

Anand Chokkavelu has no positions in the stocks mentioned above. The Motley Fool owns shares of McDonald's and Microsoft. Motley Fool newsletter services recommend McDonald's. Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.


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