Chapter 7
Income Statement
Investors will spend much of their time analyzing the income statement, which shows whether a company is making money. When it comes to valuation, the key metric is earnings. And hopefully they will continue to grow and grow.
In this chapter, we’ll delve into the key parts of the income statement. To do this, we’ll use the S-1 filing of Annie’s. Back in the late 1980s, Annie Withey started the company because she wanted to make food with real ingredients, not chemicals. At first, she marketed packaged organic macaroni cheese she had created.
Yet the company did not grow quickly. So in 2004, Withey hired John Foraker as CEO, who had an extensive career in the food business. It turned out to be a smart choice, as he expanded ...
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