The Income Statement

When you look at Fig. 12-1, you may have questions. Probably one of them is, “So what?” and that would be a logical question. Yes, the company did make a profit, but did it make as much profit as it should have? How do you determine what profit the company should have made?

Do all the numbers on this statement indicate a good operation? Or are all the numbers bad? Or, are some good and some bad? From looking at only this statement, I don’t know. Unless you are in the retail hardware business, you probably don’t know either.