How to identify a stock that grow profits consistently and separate them from a pool of other stocks that fail to do so? 

The answer lies in reading a stock’s statement of profit or loss, or widely known as income statement. It tells us whether or not, the stock has been profitable in a stipulated period of time. Personally, I believe this information is important as stock price movements tend to mirror stock profits over the long-term, which is a reason why value investing works. 

Here is a sample of a company’s income statement: 

In this article, I’ll share 5 main things on a company’s income statement so that you can interpret it easily. They are as follows: 

#1: Reporting Period 

From above, the financial year ended stated is 31 December 2018. As such, the statement accounts for the amount of revenues and expenses the company has made and