Why do people constantly quote oil companies profits incorrectly?
If you’re going to read the 10-K’s, you might as well learn how to read a statement of cash flows. The income statement tells only about operations, and the net profit includes many expenses that aren’t really expenditures of money, like depreciation and amortization, write downs of inventory and assets, and write downs of goodwill. (For most companies, income statements never include the day-to-day changes in investment values, such as oil futures. Those are found on an obscure statement usually called, “other comprehensive income” or “changes in shareholder’s equity”.) So you have to look at the statement of cash flows, as well, because it removes the fake stuff and adds all of the balance sheet transactions. The statement of cash flows is the ONLY PLACE where you’re going to find out how much money oil companies are investing in future operations. They represent the cash trading hands, not the artificial picture of operations. (They guy below me is an idiot. Companies are required t
