Please remember that the diverse nature of business activities results in a diverse set of financial statement presentations.
This is particularly true of the balance sheet; the income statement and cash flow statement are less susceptible to this phenomenon.
As noted by auditors on financial statements "the accompanying notes are an integral part of these financial statements." Please include a thorough review the noted comments in your investment analysis.
Although the income statement and the balance sheet typically receive the majority of the attention from investors and analysts, it's important to include in your analysis the often overlooked cash flow statement.However, the diversity of financial reporting requires that we first become familiar with certain financial statement characteristics before focusing on individual corporate financials.In this article, we'll show you what the financial statements have to offer and how to use them to your advantage.The financial statement numbers don't provide all of the disclosure required by regulatory authorities.Analysts and investors alike universally agree that a thorough understanding of the notes to financial statements is essential to properly evaluate a company's financial condition and performance.
Whether you're a do-it-yourself or rely on guidance from an investment professional, learning certain fundamental financial statement analysis skills can be very useful.