Lessons: Chapter 7 -  What the Income Statement Reveals

Important Links

Understand what "profit" means - MoneyWeek video: What Is Profit? 

Reading an income statement: Reading Income Statement

Video: How to Read a Profit and Loss Statement

Understanding an income statement - video from Investopedia: Understanding Income Statement



7.1: If the earnings after taxes of a company owned by 100 shareholders (each of whom own 1 share of the company)  is $200,000, what is the earnings per share (EPS) of the company?

7.2: If the earnings after taxes of a company is $200,000 and its revenue is $1,000,000, what is its net profit margin?  

7.3: What one of these items most accurately describe the meaning of retained earnings

  1. Retained earnings is the dividend of a company.

  2. Retained earnings is the earnings after taxes kept by the company instead of distributing it to its shareholders.

  3. Retained earnings is the net profit margin of a company.

7.4: If the dividend per share of a company is $2 and its share price is $40, what is its dividend yield?

7.5: Choose one of the stocks in the list below that would not be considered a blue-chip stock.

  1. General Electric (GE) stock

  2. Wal-Mart (WMT) stock

  3. Disney (DIS) stock

  4. LinkedIn (LNKD) stock


> Answers to Chapter 7 Assignments