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Basics of Stock Investing

Financial Statements

What are Financial Statements?


Financial statements are the medium by which a company discloses information concerning its financial performance. A financial statement of any company is its report card which shows how a company has fared in the last quarter / year and it is the most important aspect of fundamental analysis. It quantifies the company’s performance, strength, liquidity & profitability. 


The numbers in a company's financial statements can be bewildering and confusing to many investors. However, if we know how to accurately analyse & interpret them, the financial statements are an ocean of information.


If you can develop a grasp of the definition of the balance sheet and the structure of an income statement, it would help you identify the "red flags" and "gold nuggets" of a company. 


Three most important financial statements are:


  • Income Statement
  • Balance Sheet
  • Cash Flow Statement


We will go through each of the financial statements in our upcoming units

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Units 5/10