By: La Papillion I promised someone I'll do tat hong. In fact, I did it very briefly and posted it in the cbox, but I think that person didn't see it. Either way, May asked me to help out on reading tat hong's financial report, so here I am. First of all, I confess my accounting knowledge is lacking. As such, there are certain things that I might not know or understand. I try my best. This is what I'll look for: 1. Income statement a. Calculate gross margin, net margin b. Check to see if there's any big changes in margins c. Check to see if there's any big changes in the expenses d. Check out the earnings per share 2. Balance sheet a. With reference to income statement too, I'll calculate the ROE and note changes between years/quarters b. Calculate debt/equity, current ratio, quick ratio c. Check if there's an increase in current and long term liabilities d. Check to see if there's a big changes in inventories, trade acct receivables and cash equivalents 3. Cash flow statement a. Check cash generated from operations b. check cash flows from financing activities, does it make up the main bulk of cash and cash equivalents at end of the year c. check cash flows from investing activities, specifically any big changes in individual components. Read more...