Revenue, profit, margins and the three statements — a working introduction for investors.
Public Nigerian companies report their performance in financial statements, and you do not need an accounting degree to extract most of the value.Start with revenue — total money earned from selling goods or services. Then find profit, but be precise about which profit. Gross profit is revenue minus the direct cost of what was sold. Operating profit subtracts running costs like salaries and rent. Net profit is what remains after everything, including finance costs and tax. Each layer tells a different story.
Margins put these in context: divide profit by revenue to get a percentage, then compare it against the same company’s past years and against competitors in the same sector. A margin that is falling while revenue rises is a warning worth investigating.
The statements come in three linked parts. The income statement covers performance over a period. The balance sheet is a snapshot: what the company owns (assets), owes (liabilities) and the shareholders’ residual (equity). The cash flow statement tracks actual cash in and out — often the hardest to manipulate and therefore the most honest.
Red flags reward attention: profit that never turns into operating cash, debt rising faster than equity, and one-off “exceptional” items appearing every year. None of these is proof of anything — they are questions, not answers.
Our stock pages surface whatever metrics data provides, with N/A shown honestly where nothing sourced exists. For decisions, take your questions to a licensed adviser.