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Contents
Why Understand Finance? 1
Navigating the Three Major Financial
Statements 7
Accounting methods 11
The income statement 13
The balance sheet 17
The cash fl ow statement 22
Using the Statements to Measure
Financial Health 29
Profi tability ratios 33
Effi ciency ratios 35
Liquidity ratios 37
Leverage ratios 38
Other ways to measure fi nancial health 39
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