Summary of Interpreting the Numbers

The bottom line

In this lesson, we began to apply what we have learned about the various financial statements. We talked about the use of financial ratios and the importance of considering them in a comparative context. We covered several types of ratios, including efficiency, liquidity, leverage, and profitability ratios. By studying the concepts outlined above and completing the exercises that follow, you'll be well on your way toward understanding how to interpret a company's financial statements and analyzing a company for investment purposes.