[First published on 25/03/2016] This is very important stuff for making sense of the annual reports and I have summarized them below in simple terms for my future lazy brain. Making sense of a company's Balance sheet - it should all balance up In a Balance sheet there's two parts of equivalent values: 1) Total Assets $ = 2) Total liabilities and Equity This is because Equity = Total assets - Total liabilities, so both values would be the same. Equity is also known as net asset or net worth of a company. It comprises of two parts - Retained earnings (accumulative net income) and Treasury stocks An important ratio which you can derive from the balance sheet data is the current ratio. It is calculated as follow: Current Assets / Current Liabilities If it is more than 1.5, the company is generally doing okay (its assets are able to cover for its debts). Statement of Cash flow -  show me the money $ Image Credit link: Seeya (https://seeya.com/)...