Listed companies report results every quarter. The news turns them into short headlines such as "Sunrise Biscuits profit jumps 40%". The numbers behind such a headline are easy to read once you know a few words.
The main lines
- Revenue (or sales): the money the company earned from selling its products or services.
- Expenses: what it spent to do that, such as raw materials, salaries and rent.
- EBITDA: profit before interest, tax, depreciation and amortisation. A rough picture of the day-to-day business.
- Net profit (or PAT, profit after tax): what is left at the very end.
- EPS (earnings per share): net profit divided by the number of shares.
Margins
A margin is profit as a share of revenue. If Sunrise Biscuits earns ₹100 crore and keeps ₹12 crore as net profit, its net margin is 12%. A rising profit with a falling margin can mean costs are growing faster than sales.
Year-on-year or quarter-on-quarter?
Year-on-year (YoY) compares a quarter with the same quarter a year earlier. Quarter-on-quarter (QoQ) compares it with the quarter just before. A biscuit maker may sell more before festivals, so QoQ can mislead. YoY usually gives a fairer comparison.
What a headline can leave out
- One-time items: selling a building can lift profit for one quarter without improving the business.
- A low base: "profit up 200%" can just mean last year's profit was tiny.
- Size: a ₹5 crore profit means different things for a small and a very large company.
- Estimates: results are often reported as "beating" or "missing" analysts' estimates. Those are other people's opinions, not facts about the company.
Where to find the original
Every listed company files its results with the exchanges. Reading the filing shows exactly what the company said. Our Sources page explains where official filings come from.
Results describe the past. They do not tell you what a share's price will do next.