In other words, the information contained in annual reports, quarterly earnings statements and other public documents filed with the SEC is as close to the truth as you're going to get. Red Flags Look for these vendor warning signs. Start me up Judging a newly public company's health is tricky. Quarterly earnings and annual reports are filed on 10-K forms, so those are your first stop. Don't be put off.
Revenue is money coming in from any and all sources.
This includes the ongoing revenue stream from the sale of goods and services and one-time gains from the sale of buildings, equipment, product lines, business units, patents or technologies. Net income, also referred to as profits or earnings, is what's left over from revenue after subtracting the cost of doing business or the cost of sales. Costs include research and development, production, and the cost of sales, general business expenses and administrative costs. What you're hoping to see in a healthy company is a strong, sustained increase in revenue and earnings, when all the one-time charges are subtracted. With a start-up, you're looking for signs that revenue is increasing and that the company has enough money to stay afloat until it begins turning a profit.