ABSTRACT
This chapter is about reading, analyzing and understanding the information contained in an organization’s financial statements. After reading this chapter you will:
Be better able to read and understand financial statements
Be able to compare different firms’ financial information
Gain new insights into firms’ operations and financial health
Understand the concepts of liquidity, leverage, asset activity and profitability
Financial statements reveal a lot more about a company than what it earned, what it owes and the historical value of its assets. To bring the economics of a firm into focus you need to study and thoroughly analyze its financial statements. That’s what this chapter is about.