What are Financials?
Financials consolidate detailed explanations of a company’s three primary financial statements and their components:
- Income Statement: Measures revenue and expense flows to determine profitability over a period.
- Balance Sheet: Captures assets, liabilities, and equity at a point in time to illustrate financial position.
- Cash Flow Statement: Tracks actual cash movements from operating, investing, and financing activities.
Why Financials Matter
Together, these statements provide:
- Performance Insights: Reveal how well a company generates earnings and manages costs.
- Liquidity Assessment: Show the ability to meet short‑term obligations and invest in operations.
- Solvency and Capital Structure: Highlight long‑term debt levels, equity cushions, and funding mix.
How to Use the Financials Folder
- Navigate by Statement: Select the specific statement subfolder (Income Statement, Balance Sheet, Cash Flow) to find focused metric guides.
- Understand Key Metrics: Each guide defines a metric, explains its importance, shows calculation methods, and offers analysis tips.
- Perform Holistic Analysis: Combine insights from all three statements to assess overall financial health, growth prospects, and risk exposures.
Additional Considerations
- Interrelationships: Recognize how net income flows into retained earnings and operating cash flow, or how capex and financing decisions alter balance sheet structure.
- Comparative Analysis: Use consistent period comparisons and peer benchmarking for meaningful conclusions.
- Updates and New Metrics: Revisit this folder periodically for additions like advanced ratio analysis or sector‑specific metrics.