While a bulky printed financial statement might look daunting, it is not as dense as it looks, and is really not that difficult to read and understand once you learn the terminology. Sure, being able to read a financial statement takes a little basic finance knowledge and understanding of basic accounting principles, but it is really not that complex.
Reading and Understanding a Company Financial Statement
The basic information involved is expenses vs. earnings - that is, did the company report a profit or a loss during the reporting period. But there are a myriad of factors that go into calculating net profits or losses, and the financial statement of a company provides a detailed look at what went into calculating the bottom line.
A financial statement is typically divided into four sections – the balance sheet, the income statement, the cash flow statement, and the statement of shareholders' equity.
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