Additionally, by comparing the current year’s performance against prior years (i.e., up/down) potential investors may better assess whether they want to put their money into that particular stock or not; since trends such as increasing profits generally indicate positive growth while decreasing ones could point towards more questionable investments which should be avoided if possible. This data allows investors to make informed decisions on where to invest money. It also allows them to decide if certain investment opportunities are suitable for their financial circumstances.
Ultimately though understanding how a business’s past financial performance has gone can help give investors an idea of what kind gains (or losses) might occur in future—making net income an essential piece when trying analyzing any investment scenario before moving forward with it.