What the Numbers Actually Say
Most investors start with the income statement. That's backwards. This series shows you how to read all three financial statements the way a business owner would — starting with cash flow, then earnings, then the balance sheet — so you can tell the difference between a company that looks profitable and one that actually is.
When the income statement says "profitable" and the bank account says "empty," you need to know which one is telling the truth. Most people who want to understand a company…
Read this postNet income is the number the market obsesses over. It’s also the one most likely to mislead you — and learning to see past it is one of the most…
Read this postThe income statement tells you what the business earned. The balance sheet tells you what the business is built on: the assets it owns, the obligations it carries, and whether…
Read this postThe income statement, balance sheet, and cash flow statement are summaries. The notes explain the assumptions behind them. The MD&A tells you what management wants you to think about the…
Read this postFor decades, a company could owe billions in future lease payments — for stores, planes, equipment — without a single dollar of that obligation appearing on its balance sheet. A…
Read this postYou’ve learned the five statements. Now here’s the order to read them — and why that sequence turns individual pieces into a complete picture. You’ve worked through five parts of…
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