A quién sirve — Anyone reading 10-K, quarterly reports or IFRS filings before buying equities or corporate bonds. Three documents, one coherent story.
Financial statements comprise the balance sheet, income statement (P&L) and cash flow statement — snapshot of assets, liabilities, profitability and cash movements over a period.
In plain terms — «What it owns, what it owes, how much it earns and where cash goes» — basis for EPS, EBITDA and FCF.
The three statements
| Document | Answers | Key metrics |
|---|---|---|
| Balance sheet | What owned and owed? | Cash, debt, equity |
| Income statement | How much earned? | |
| Cash flow | Real cash? | OCF, capex, FCF |
Read together: accounting profit without cash → red flag; debt rising with buybacks → risk.
Operational reading
- YoY comparison and vs earnings guidance
- Footnotes: accounting policy, contingent liabilities
- Adjusted vs GAAP metrics — understand exclusions
- Bridge to valuation: multiples and DCF
Error típico — Income statement only — balance sheet reveals leverage and liquidity P/E hides.
Ejemplo — EPS growing but debt doubled and interest expense ↑ → deteriorating earnings quality despite stable P/E.
Card
- Quarterly: 10-Q / equivalent report.
- Annual: 10-K with audit.
- Hub: Fundamental analysis.