How to judge the operating results of an enterprise through the income statement?

The income statement refers to matching the operating income of an enterprise in a certain period with the sales expenses in the same period, so as to obtain the net profit (or net loss) in that period. Therefore, the focus of this report is the relevant income indicators and cost indicators. The basic idea of looking at the income statement is that income and expenses = profit. There are five striking accounting indicators in the income statement, which are: operating income? Operating profit? Total profit? Net profit. Among these indicators, we should focus on: operating profit, total profit and net profit. Look at the net profit of the last line first, and then look at the total profit. This is the first step to check the operating results: grasp the results as a whole. The purpose of grasping achievements is to see whether enterprises make money or lose money. If the net profit is positive, it means that the enterprise is making money. If the net profit is negative, the enterprise is losing money. However, many people often only care about net profit, thinking that a positive net profit means a company's profit, and a negative net profit means a company's loss. In fact, the long-term development power of an enterprise comes from the development and operation of its main business. (2) Stratified observation. The purpose of hierarchical observation is to let enterprises know where to make money. By observing the proportion of each component in the total profit, it can be explained whether the profit of the enterprise is normal and reasonable. Under normal circumstances, the profit of an enterprise's main business should be the most important part of its total profit, accounting for the highest proportion, while the profits of other businesses, investment income and non-operating income and expenditure should not be relatively high. If something unusual happens, more analysis and research are needed. Attention should be paid to the following aspects when analyzing and observing. In the income statement, the main business profit and operating profit of an enterprise are the profits generated by the daily business activities of the enterprise, which can best explain the profitability of the enterprise. If the enterprise's main business profit or operating profit is high, it shows that the enterprise's profitability is good; If an enterprise does have a lot of profits, but not the main business profits, but through uncontrollable events or accidental transactions, this does not explain the size of the enterprise's profitability. When looking at the income statement, we should not only look at the net profit, but also pay attention to the changes of main business income, operating profit and recurring net profit. For example, the net profit of enterprise A decreased in 2005.