Table of Contents 
 
1) Introduction 
2) Who's in Charge? 
3) The Financial Statements Are a System 
4) Cash Flow 
5) Earnings 
6) Revenue  
7) Working Capital 
8) Long-Lived Assets 
9) Long-Term Liabilities 
10) Pension Plans 
11) Conclusion and Resources 
 
 
Introduction 
 
Whether you watch analysts on CNBC or read articles in the Wall Street Journal, 
you'll hear experts insisting on the importance of "doing your homework" before 
investing in a company. In other words, investors should dig deep into the 
company's financial statements and analyze everything from the auditor's report to 
the footnotes. But what does this advice really mean, and how does an investor 
follow it?  
The aim of this tutorial is to answer these questions by providing a succinct yet 
advanced overview of financial statements analysis. If you already have a grasp of 
the definition of the balance sheet and the structure of an income statement, great. 
This tutorial will give you a deeper understanding of how to analyze these reports 
and how to identify the "red flags" and "gold nuggets" of a company. In other words, 
it will teach you the important factors that make or break an investment decision.  
If you are new to financial statements, have no worries. You can get the background 
knowledge you need in these introductory tutorials o