O'Reilly logo

A Refresher in Financial Accounting by Faisal Sheikh

Stay ahead with the world's most comprehensive technology and business learning platform.

With Safari, you learn the way you learn best. Get unlimited access to videos, live online training, learning paths, books, tutorials, and more.

Start Free Trial

No credit card required

CHAPTER 7

Interpretation of Financial Statements

Financial statements highlight more about a company than what it earned, what it owes, and the historical value of its assets. Thus to demonstrate the economics of a company, you need to study and deeply analyze its financial statements.

It is important to note that no individual figures on a financial statement are useful in isolation. Let us assume that Company A1’s income statement indicates a net income of $100,000 and Company B2’s a net income of $300,000. It is apparent that Company B2 made twice the profit of Company A1.

However, does that really mean that Company B2 is twice as profitable? Is it operated more efficiently? Would you want to invest in Company B2 rather than Company A1? What ...

With Safari, you learn the way you learn best. Get unlimited access to videos, live online training, learning paths, books, interactive tutorials, and more.

Start Free Trial

No credit card required