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To: GraceZ who wrote (30692)	10/24/2000 11:59:31 PM
From: Perspective	Read Replies (1) \| Respond to of 436258

<You are confusing the income statement with the balance sheet here.> NO, and I'm really starting to get irritated about this. The whole point to having an income statement is to chart the changes in shareholder equity over time. I want to be able to compare the return on my investment in company A with the return I might get on, say, a US treasury. In order to do that, I need to see how my slice of shareholder equity is changing over time. Ignoring nebulous capital stock changes like this, the income statement is just the derivative of the balance sheet quantities (that is, in the calculus sense - the change in equity vs. time). Rather than taking out the balance sheets from multiple timepoints and performing the delta myself, each company is required by the SEC to provide an "income" statement that does this for me. THAT IS THE JOB OF AN INCOME STATEMENT - TO TELL ME HOW MY SLICE OF SHAREHOLDER EQUITY IS CHANGING WITH TIME. I've already caved on the notion that it is virtually impossible to figure out what the correct charges against earnings would be in overpriced acquisitions - they depend on the relative degree of valuation of the two companies, and that is entirely subjective. But my earlier statement stands regardless: Income statements are a way of charting changes in shareholder equity over time. BC