The most important statements in fundamental analysis would be the 3 main statements, which are the income statement, balance sheet and statement of cash flows.
Income statement is the profitability over a period of time. It shows the revenue and expenses for that period.
Balance sheet is the financial position of a firm a a point in time. The balancing of the assets, liabilities and owners' equity is done on this financial statement. An important formula to use would be:
Income statement is the profitability over a period of time. It shows the revenue and expenses for that period.
Balance sheet is the financial position of a firm a a point in time. The balancing of the assets, liabilities and owners' equity is done on this financial statement. An important formula to use would be:
Assets - Liabilities = Owners' Equity
A comparison of two years is usually presented for analysis to be done.
Statement of cash flows, as the name states, is the cash inflow and cash outflow of a firm over a period of time. It can be divided into 3 types: operation, investing and financing. I would rate the statement of cash flows highly relevant as there is little element of doubt as compared to the other two as the cash is already banked in and is harder to be manipulated with.
It is good to master these 3 statements for your analysis of a company.
