- 1). Obtain five years of earnings data for the company. You will probably need to obtain three annual reports in order to get five years of earnings. You can download the annual report from the website of the company, usually through an "Investor Relations" section, or request one from your broker. You may also be able to find a download available on your favorite investment research site.
- 2). Turn to the income statement and take down the last four years of earnings. You can use either net income or earnings per share, which is calculated by taking the net income and dividing it by the number of shares outstanding.
- 3). Add the last four years of earnings (net income) to the most current quarterly earnings reports. The most recent current quarterly earnings are usually posted on the website within the most recent press release. To be clear, companies are required to report both annual and quarterly earnings. You need to add the most recent quarters in order to calculate 'trailing' five year earnings.
- 4). Walk through an example. You need 20 quarters (4 quarters times 5 years) of data for five years of trailing earnings data. Start with the most recent quarters and work backwards. For instance, if you need 20 quarters of data and the most recent company press release shows two quarters of data, you need another 18 quarters of earnings to add to the two most recent quarters.
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