income-statement-growth

# Income Statement Growth

Retrieve and analyze year-over-year growth in key income statement items for public companies using Octagon MCP.

## Prerequisites

Ensure Octagon MCP is configured in your AI agent (Cursor, Claude Desktop, Windsurf, etc.). See [references/mcp-setup.md](references/mcp-setup.md) for installation instructions.

## Query Format

```
Retrieve year-over-year growth in key income-statement items for <TICKER>, limited to <N> records and filtered by period <FY|Q>.
```

**MCP Call:**

```json
{
  "server": "octagon-mcp",
  "toolName": "octagon-agent",
  "arguments": {
    "prompt": "Retrieve year-over-year growth in key income-statement items for AAPL, limited to 5 records and filtered by period FY"
  }
}
```

## Output Format

The agent returns a table with YoY growth percentages:

| Fiscal Year | Revenue Growth (%) | Gross Profit Growth (%) | Operating Income Growth (%) | Net Income Growth (%) | EPS Diluted Growth (%) |
|-------------|-------------------|------------------------|----------------------------|----------------------|------------------------|
| 2025 | 6.43 | 8.04 | 7.98 | 19.50 | 22.70 |
| 2024 | 2.02 | 6.82 | 7.80 | -3.36 | -0.82 |
| 2023 | -2.80 | -0.96 | -4.30 | -2.81 | 0.33 |
| 2022 | 7.79 | 11.74 | 9.63 | 5.41 | 8.91 |

**Data Source:** octagon-financials-agent

## Key Observations Pattern

After receiving data, generate observations:

1. **Growth acceleration**: Identify years with strong growth across all metrics
2. **Margin divergence**: Note when Net Income growth differs significantly from Revenue growth
3. **EPS vs Net Income**: Compare EPS growth to Net Income growth (share buybacks impact)
4. **Contraction periods**: Flag years with negative growth and potential causes

## Follow-up Queries

Based on results, suggest deeper analysis:

- "What factors contributed to the significant net income growth in [YEAR] despite moderate revenue growth?"
- "Why did net income decline in [YEAR] despite positive operating income growth?"
- "How did [COMPANY]'s cost management strategies impact gross profit trends?"

## Metrics Reference

| Metric | Definition |
|--------|------------|
| Revenue Growth | YoY change in total sales |
| Gross Profit Growth | YoY change in Revenue minus Cost of Goods Sold |
| Operating Income Growth | YoY change in income from core operations |
| Net Income Growth | YoY change in bottom-line profit after all expenses |
| EPS Diluted Growth | YoY change in earnings per share (fully diluted) |

## Analysis Tips

1. **EPS outpacing Net Income**: Indicates share buyback activity reducing share count
2. **Gross Profit > Revenue growth**: Margin expansion from pricing power or cost efficiency
3. **Operating Income > Gross Profit growth**: Operating leverage from fixed cost management
4. **Net Income volatility**: Often driven by one-time items, taxes, or interest expenses