A company generates following reports annually.
- Balance sheet (on 31st March)
- Income statement
- Statement of cash flow
These three documents are the only tool with common investor to assess the company's financial strengths. (I am certainly not discounting insiders :-)
Lets understand these concepts via mind maps:
Balance Sheet
Balance Sheet
Income Statement
Statement of Cash Flow
Statement of cash flow is the most important document. If the company is unable to keep positive cash from operations, still it is able to show net earnings, it could be a sign of window dressing.
Statement of cash flow is the most important document. If the company is unable to keep positive cash from operations, still it is able to show net earnings, it could be a sign of window dressing.
No comments:
Post a Comment