Beginners' Guide to Financial Statements

The Basics

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.

This brochure is designed to help you gain a basic understanding of how to read financial statements. Just as a CPR class teaches you how to perform the basics of cardiac pulmonary resuscitation, this brochure will explain how to read the basic parts of a financial statement. It will not train you to be an accountant (just as a CPR course will not make you a cardiac doctor), but it should give you the confidence to be able to look at a set of financial statements and make sense of them.  

More info:

• “Show me the money!”

• Balance Sheets

• Income Statements

• Earnings Per Share or EPS

• Cash Flow Statements

• Operating Activities

• Investing Activities

• Financing Activities

• Read the Footnotes

• Read the MD&A

• Financial Statement Ratios and Calculations

• Bringing It All Together

Source: http://www.sec.gov/investor/pubs/begfinstmtguide.htm