The annual report contains all three financial statements.
Business research is fundamental for investment analysis. The business profile tells the investment analyst what the business does and provides a little history about the company; however, financial data is needed to assess the financial viability of the firm. While you can obtain financial data from several sources, the most reliable source is straight from the company. The Securities and Exchange Commission acts as a regulating agency to ensure these documents are published and are accurate and reliable.
Instructions
1. Obtain the annual report for the company. You can usually download the annual report from the company website or request that a hard copy be sent to you by contacting the company's investor relations department.
2. Turn to the financial statements in the annual report. This is the company's raw financial data. It is audited and submitted to the Securities and Exchange Commission for review so it is considered to be the most reliable and accurate financial data from the company. There are three main financial statements that provide different types of financial data.
3. Turn to the balance sheet. The balance sheet provides a snapshot of the firm's assets and liabilities on a certain date, which is listed at the top of the financial statement. Assets are listed first, followed by liabilities and then stockholders' equity.
4. Go to the income statement. The income statement provides at least two years of financial data about the company's earnings. Revenues are listed first and then expenses are deducted from revenues to arrive at net income.
5. Look at the cash flow statement. The cash flow statement is a combination of both the income statement and the balance sheet and is used to determine where cash flow is being generated within the company. It starts with the cash flow generated or used by operations, then investments and then financing.
