One Step at a Time: A practical approach to understanding an income statement

Attorneys involved in lost profits litigation have likely seen more than a few income statements, or “profit and loss” statements. A solid understanding of the income statement is helpful in identifying the strengths and weaknesses of a case, assessing an expert report, or preparing a successful cross-examination. This article sets forth a practical approach for reading, understanding and analyzing an income statement.

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The Accounting Fives

A few months ago, I posted an article titled "Internal Controls and the Five Senses." More recently, I discussed the five methods used to project sales when performing an income loss evaluation. Two fives. A coincidence? Maybe not; as it turns out, five is quite popular in accounting. This is a strange observation since five is an odd number and accounting is all about symmetry and balance.

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Accounting is Life!

I was drawn to the accounting profession when I heard the phrase "accounting is the language of business." I'm not sure who coined that phrase, but I'm taking credit for this one - "Accounting is Life."

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