Master Financial Statement Analysis

Learn to read and analyze financial statements like a professional

Introduction to Financial Statements

Financial statements tell the story of a company's financial health. The three main statements are:

  • Balance Sheet
  • Income Statement
  • Cash Flow Statement

Balance Sheet Analysis

Assets = Liabilities + Equity

Assets

  • Current Assets
  • Fixed Assets
  • Other Assets

Liabilities & Equity

  • Current Liabilities
  • Long-term Liabilities
  • Shareholders' Equity

Income Statement Analysis

Net Income = Revenue - Expenses

1. Revenue
2. Cost of Goods Sold
3. Gross Profit
4. Operating Expenses
5. Net Income

Key Financial Ratios

Liquidity Ratios

Current Ratio = Current Assets ÷ Current Liabilities

Profitability Ratios

Profit Margin = Net Income ÷ Revenue

Efficiency Ratios

Asset Turnover = Revenue ÷ Average Total Assets