95% of investors, or my clients, shun financial statements like some kind of poison. They frown upon the mention of it, let alone reading through these statements.

But the truth is successful investment cant run away from analysing Financial Statements. As Warren Buffet puts it, accounting is the language of business, presented in the form of Financial Statements. They are important documents which companies communicate to us investors, how well the business is doing.

But reading financial statements need not be such a painful experience. We do not need to know how statements are prepared. Just like we don’t have to know how a car engine works in order to drive one.

With a little effort and some common sense, we can understand the gist of it, and interpret key numbers that illustrate the health of a business.

In this article I would try to give an overview, a …