investors to understand how a company's operations are running, where its money is coming from, and how it is being spent.
Due to the accrual accounting, the income statements released each quarter may not necessarily reflect changes in their cash positions. For example, if a company lands a major contract, this contract would be recognized as revenue (and therefore income), but the company may
(2) Trend income statements
(%) 2009 2008 2007 2006 2005
sales 338 367 191 143 100
gross profit 4 301 409 174 100
operating income -330 254 479 179 100
income before income tax -906 128 482 169 100
net income -15,685 2,123 7,877 1,120 100
From comparative income statements and trend income statements above, we can see that net income in 2009 plunged dramatically. However, compare to 2
investors. Especially, although Royal dutch shell has a little up and down change, it is just slight amount and absolute numerical value is higher than Chevron. So it can be said to be more attractive to investors. But Chevron is also attractive.
4. EPS
If EPS shows high ratio, the value to invest this company is increasing.
EPS is measure of return on investment that is based on the number
foreign exchange. Considering recent trend of weak Korean Won(\) currency, Korean air would probably show similar pattern(low other income and high other expense) or even worse in 2008.
- Overall, both company's level of net earnings is extremely low which means their business is not going well.
Balance Sheet - Common Size
Assets
AMR Corp Korean Air AMR Corp Korean Air
2007 2007 20