Balance Sheets Without Tears

Balance Sheets Without Tears

Balance sheets without tears!

The third source of information which enables you to judge 1. the soundness of a security consists of the facts elicited from your own observation and interpretation. This source of information is the most important and valuable basis on which to build your judgment of a security. When you investigate the financial standing of a company, from the examination of its balance sheet, you are evaluating its strength and weakness, its assets and reserves and their adequacy to finance its undertakings and to meet any unexpected setback, and also its present and future earning capacity. To supplement the information gleaned from the balance sheet you should also study the company's profit and loss account, the annual report and the chairman's statement.

The business of reading a balance sheet with understanding, so fearful and ibrmidab!e an undertaking to most people, can in reality be quite simple for an average investor. Thesewebpages are intended to enable you to:

1. Understand the meaning of a balance sheet.

2. Read companies' balance sheets with comprehension.

3. Follow Press analyses and comments.

4. Elicit facts to judge the soundness of your investment.

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Further reading Working Capital - Liabilities Side



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