How Do You Learn Financial Statement Analysis?
Financial statements share information about company operations with employees and the public. The most common types of financial statements are balance sheets, income and cash-flow statements. The balance sheet describes assets and liabilities, the income statement details earnings and the cash-flow statement uses components of both balance sheet and income statement to illustrate the sources and uses of cash. Learning financial statement analysis means developing a familiarity with the structure and form of financial statements. Read over Management’s Discussion and Analysis. This is usually the first section in the annual report and is presented before the financial statements. This section is a narrative explanation for the financial statements. Review the balance sheet. The balance sheet equation is: assets = liabilities + stockholders equity The balance sheet provides a snapshot of the assets owned by a company as well as how the company paid for those assets. Assets are listed i
