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Guide to understanding basic financials
A basic introduction to reading financial statements
Introduction
This Guide provides basic information on how to read the financial statements in a company’s annual report. The Guide discusses key numbers in each of three statements common to all annual reports and offers suggestions from experienced investors on making sense of these numbers.
Like any new and complex subject, the language of financial statements may at first seem mysterious, even intimidating. This Guide can help you begin to gain a basic financial vocabulary and to understand the subject. Topics cover only the fundamentals of accounting and financial reporting, and the Guide and its Glossary explain the terms and ideas you’ll need to understand these topics.
So, even if you never take up permanent residence in the realm of finance, you’ll at least be comfortable as an occasional visitor.
Introduction
What’s an annual report?
Statement basics
About the statements
Statement of earnings
Statement of financial position
Statement of cash flows
Analyzing the statements
Glossary
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