YIS Unit 5: Lesson Two

Rank the three companies in order from:

Highest to lowest revenue

Highest to Lowest Cost of Revenue/ Expenses

Highest to Lowest Profit

Based on this information alone, which company would you consider most successful in 2021? Justify your answer

Why is the income statement important?

Which two lines on the income statement do you think are the most important?

Calculate Free Cash Flow

Free Cash Flow = Net Income + Depreciation - CAPEX

(Capex is "Payments for acquisition ofproperty, plant, & equipment")

What is the net income?

Does the company have better margins for services or revenue?

What is the profit margin?

How much of every dollar in revenue does the company get to keep?