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At the top is income and revenue information. When looking at an income statement, you’ll see that there are three main sections. If a company does pay dividends to shareholders, the income statement will show how much the company paid out.

Companies don’t have to make these payouts, though, and they usually reinvest the money back into the company instead of paying it to shareholders. This is the amount that a company would pay shareholders, per share, if the company paid out all of its net income as dividends. When a company isn’t profitable or if its profits change from year to year, an income statement lets you see where the money is going.Īnother important feature for investors is the information on earnings per share (EPS). You can also look for trends in company spending and earnings because the statement breaks down individual revenue and expenses. Investors use income statements to determine the profitability of a company over time. When researching a company, you want to know if the company is profitable. Why Investors Should Care About Income Statements

This frequency keeps companies honest about their finances and it helps investors who are researching a company. Securities and Exchange Commission (SEC) every quarter. Income statements usually cover one year, but all public companies must submit them to the U.S.