Mastering Financial Statements

Financial statements can be compared to prior periods to understand changes over time. For example, comparative income statements show a company's income for different years, allowing users to note the year-over-year change and assess the company's health.

Financial statements are used to provide a snapshot of a company's financial performance and position. They help stakeholders, such as investors and creditors, assess the company's profitability, liquidity, and solvency.

Financial statements can be compared to competitors or other industry participants to assess how a company is performing relative to others. Analysts can identify which companies are performing well and which are lagging behind the industry by analyzing financial statements.

The link is that if someone can read a nutrition label or a baseball box score, they can also learn to read financial statements. The basic skills of interpreting information and understanding key metrics are transferable.

Beginners can find a guide to understanding financial statements on the SEC.gov website. The guide provides a basic overview of financial statements and how to read them.

A corporate collapse typically involves the insolvency or bankruptcy of a major business enterprise, while a corporate scandal involves alleged or actual unethical behavior by people acting within or on behalf of a corporation.

Many recent corporate collapses and scandals have involved false or inappropriate accounting.

Possible outcomes of a major corporate collapse include entering into insolvency or bankruptcy, being nationalized, or requiring a non-market loan by a government.

An example of a corporate scandal involving the Australia & New Zealand Banking Group is the allegations of racial bigotry toward billionaire businessman Pankaj Oswal and his wife.

The Australia & New Zealand Banking Group scandal is related to misleading file notes in the Financial Ombudsman Service (Australia) presented to the Supreme Court of Victoria.