CHAPTER 3
Numbers Don’t Lie—Or Do They?
Financial statements provide us with the fundamental information that we use to analyze firms. Although you may be able to become a successful investor without ever understanding financial statements, it does make the investment process a lot easier if you can make sense of them. It is important, therefore, that we examine the principles governing these statements and how they help us (or fail to help us) answer four questions:
We will look at the way accountants would answer these questions, and why financial statements can sometimes provide a misleading picture of a firm’s health and ...
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