Investing classroom: Financial statements

Stocks lesson 1.7: Our latest investing lesson looks at understanding the financial health of a company

Morningstar 8 October, 2009 | 4:05PM
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Although the words "financial statements" and "accounting" send cold shivers down many people's backs, this is the language of business, a language investors need to know before buying stocks. The beauty is you don't need to be a banker to understand the basics of the three most fundamental and important financial statements: the income statement, the balance sheet, and the statement of cash flows.

The financial statements are windows into a company's performance and health. We'll provide a very basic overview of each financial statement in this lesson and go into much greater detail in later on.

The income statement

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The information contained within is for educational and informational purposes ONLY. It is not intended nor should it be considered an invitation or inducement to buy or sell a security or securities noted within nor should it be viewed as a communication intended to persuade or incite you to buy or sell security or securities noted within. Any commentary provided is the opinion of the author and should not be considered a personalised recommendation. The information contained within should not be a person's sole basis for making an investment decision. Please contact your financial professional before making an investment decision.

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