Start with the balance sheet
Review the income statement
Check the cash flow statement
Compare multiple periods
Look at revenue trends
Examine profit margins
Assess liquidity ratios
Assess leverage ratios
Review operating cash flow
Compare net income to cash flow
Check assets and liabilities
Review shareholder equity
Read the notes to the statements
Identify one-time items
Compare with industry peers
Watch for accounting changes
Focus on consistency over time
Check auditor’s report
Use key financial ratios
Look for red flags
Connect all three statements