One of the key components to making financial decisions is to understand the amount of net income understand the timing and amount of cash flow understand the timing and amount of dividends understand the timing of EBIT If you query a company at you will see a menu that includes a section on financial statements and provides the past six years of each of the primary financial statements provides an online tutorial on how to understand the government's role in affecting stock prices provides the past three years of each of the primary financial statements provides, at a cost, online access to limited information on a company's financial reports The income statement begins with revenue and subtracts various operating expenses until arriving at Earnings Before Interest and Taxes. Next, interest expense is subtracted to find the taxable income for the period. Then the appropriate taxes are calculated and subtracted. We finally arrive at the, the so-called bottom line of the income statement. before-tax income after-tax income EBIT net income Assuming that stocks represent most industries, the number of stocks necessary to eliminate nearly all unsystematic risk varies from 20 to 30 30 to 50 10 to 20 5 to 10