true or false
= Pretax Income - Taxes = Net Income - Net income Attributable to Noncontrolling Interests (NCI) = Net Income Attributable to Company Preferred Stock Dividends = Net Income Attributable Common Required Homework Questions Each profit level is followed by an additional expense category so that profits at each subsequent level are generally increasing in value. The Income Statement always explains how a company generates Net Income (sometimes referred to as Net Profits).71 Dividends can also be paid in stock. 872 Special dividends (non recurring) can be issued in addition to or in lieu of regular dividends. $73 The portion of Net Income that is not allocated to dividends is retained as Equity. 74 875 76 Required Homework Questions $77 378 Research & Development (R&D) are expenses incurred in enhancing and innovating products 379 Interest income is earned on a company's Cash and Marketable Securities. 380 Revenues are the value generated by providing goods and services to customers. 381 Cost of Revenues is calculated by subtracting Operating Expenses from Revenues 82 Cost of Revenues include Selling, General & Administrative (SG&A) expenses. 383 Operating Expenses are directly related to the provision of goods and services (discretionary period costs) 84 Research & Development (R&D) is an Operating Expense 885 Earnings per Share (EPS) is not impacted by share issues or repurchases. 86 Non-Operating Income (Expenses) are interest and other income (or expenses) unrelated to the provision of goods or services. 87 Gross Profit is calculated by dividing Gross Margin by Revenues 88 389 $90 $91 8922017 - Present After almost two-decades of working to make non-GAAP financials meaningful, significant issues remain unresolved. As of December 2017, the Public Company Accounting Oversight Board (PCAOB) called for non-GAAP measures to be audited, just as GAAP financial information. This organization represents auditors, who have a self-serving incentive to suggest expanding the role of auditors. As of May 2019, the Council of Institutional Investors (CII) filed a petition with the SEC urging the agency to fix what it says is a regulatory loophole allowing companies to use potentially inflated earnings data in assessing executives' pay without explanation. Required Homework Questions Non-GAAP measures have become extremely common. Non-GAAP measures often separate or remove certain aspects of a company's operations or the effects of large, unusual, or nonrecurring transactions. Non-GAAP measures are audited.3 Required Homework Questions The outperformance of NewCos is significantly a result of Information Technology and the Communication sectors. NewCos' margins are significantly outperforming those of OldCos. The R&D spending of NewCos is dramatically higher than OldCos while SG&A is significantly lower. 8 1 2
