An Introduction to Financial Statement Analysis

“If you can read a nutrition label or a baseball box score, you can learn to read basic financial statements. If you can follow a recipe or apply for a loan, you can learn basic accounting. The basics aren’t difficult and they aren’t rocket science.”
– U.S. Securities and Exchange Commission

What Do Financial Statements Do?

Financial Statement AnalysisFinancial statements show you where a company’s money came from, where it went, and where it is now. There are four main financial statements:

  1. Balance Sheets – show what a company owns and what it owes at a fixed point in time.
  2. Income Statements – show how much money a company made and spent over a period of time.
  3. Cash Flow Statements – show the exchange of money between a company and the outside world also over a period of time.
  4. Statements of Shareholders’ Equity – show changes in the interests of the company’s shareholders over time.

Visit the SEC website for the full beginner’s guide to financial statements, or contact Millan & Company at 512-479-6819 to get expert help with your financial reporting. Financial reporting includes financial statement analysis, which provides useful information for investment, credit decisions, and assessing cash flow prospects.

Photo Credit: Philippe Put via Compfight cc

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