Net Income - The NASDAQ Dozen
Net Income
To analyze the company’s net income, click on the Company Financials link listed in the drop-down menu at the top of the screen (see Figure 9).
Figure 9—Company Financials Link
Importance of Net Income
Net income is used to determine what a company’s "bottom line" is. This will give you a good idea of how profitable a company is over extended periods of time, and how well its business is growing each year.
Scoring Net Income
- Pass—Give this factor a passing score if the stock has increasing year-over-year net income totals.
- Fail—Give this factor a failing score if the stock has decreasing year-over-year net income totals.
Looking at the net income totals for GOOG in Figure 10, it clearly should receive a passing score. Net income is growing at an incredible rate.
Net Income: PASS
Figure 10—Net Income Results
Now that you have scored the first half of the 12 factors, you can move on to score the last six factors of the NASDAQ Dozen by going to the drop-down menu in the upper-left corner and selecting Analyst Stock Research.
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