How to read a financial statement?

[niyati]

Hi everyone, I'm new to finance and trying to learn how to read financial statements like the income statement, balance sheet, and cash flow statement. What key things should I focus on, and how can I tell if a company is doing well or not?

 

[jatin]

To read a financial statement, understand the three main statements:

1. Balance Sheet: Shows assets, liabilities, and equity at a specific point in time.
2. Income Statement: Summarizes revenues, expenses, and profitability over a period.
3. Cash Flow Statement: Tracks cash inflows and outflows.

Analyze each section, identifying key figures and trends, and consider ratio analysis for deeper insights.

 

[Shane Warne]

To read a financial statement, start with the balance sheet for assets, liabilities, and equity. Then review the income statement for revenue and expenses to assess profitability. Lastly, examine the cash flow statement to see how cash moves in and out. Look for trends and ratios.

 

[alenaghose]

To read a financial statement, start by reviewing the income statement to see profits and losses. Then, check the balance sheet for assets and liabilities. Finally, look at the cash flow statement to understand cash movement. Together, these show a company’s financial health and performance.

 

[brook]

Read a financial statement by first reading the balance sheet of assets, liabilities, and equity. Then check revenue and expenses in the income statement to determine profitability. Finally, look at the cash flow statement to determine flows in and out in terms of cash. Seek patterns and percentages.

 

[Gsusangrey]

Focus on three key reports:

1. Balance Sheet (assets, liabilities, equity)
2. Income Statement (revenue, expenses, profit)
3. Cash Flow Statement (operating, investing, financing activities).

Analyze trends, ratios, and comparisons for insights.

 

[Mayank]

To read a financial statement, review the balance sheet for assets and liabilities, the income statement for revenue and expenses, and the cash flow statement to track cash movements. Analyze trends and ratios.