QUICK TIPS FOR READING THE FINANCIALS
- Numbers in brackets are negative numbers. The brackets are easier to see than the minus sign. If the bottom line is in brackets, the company is in trouble.
- No zeros. Too many zeros make balance sheets unwieldy and too difficult to read, therefore, they are eliminated. There will be a note at the bottom indicating “numbers are in billions” in financial reports of large organizations.
- Read profit and loss statements from top to bottom. Top line is gross income; the bottom line is profit.
- Read the footnotes. They are bursting with information, including significant accounting policies and practices, ...
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