some money terms

Statement of Income — Example (figures in millions)
Operating Revenues
Net Sales	$20,438
Operating Expenses
Cost of goods sold	$7,943
Selling, general and administrative expenses	$8,172
Depreciation and amortization	$960
Other expenses	$138
Total operating expenses	$17,213
Operating income	$3,225
Nonoperating income	$130
Earnings before interest and income taxes (EBIT)	$3,355
Net interest expense	$145
Earnings before income taxes	$3,210
Income taxes	$1,027
Net income	$2,183

(Table info source: Bodie, Z., Kane, A. and Marcus, A. J. Essentials of Investments, McGraw Hill Irwin, 2004, p. 452.)

P/E ratio (price-to-earnings ratio)

N/A	A company with no earnings has an undefined P/E ratio. By convention, companies with losses (negative earnings) are usually treated as having an undefined P/E ratio, although a negative P/E ratio can be mathematically determined.
0–10	Either the stock is undervalued or the company's earnings are thought to be in decline. Alternatively, current earnings may be substantially above historic trends or the company may have profited from selling assets.
10–17	For many companies a P/E ratio in this range may be considered fair value.
17–25	Either the stock is overvalued or the company's earnings have increased since the last earnings figure was published. The stock may also be a growth stock with earnings expected to increase substantially in future.
25+	A company whose shares have a very high P/E may have high expected future growth in earnings or the stock may be the subject of a speculative bubble.