MEPX
Chapter 10 of 10All chapters
  1. 1What accounting is for
  2. 2The accounting equation
  3. 3The three statements
  4. 4Accruals and matching
  5. 5Profit against cash
  6. 6Bookkeeping in practice
  7. 7Reading the numbers
  8. 8Costs
  9. 9Controls and audit
  10. 10Reading a company report

Chapter 10 of 10

Reading a company report

Where to look first.

An order of reading

Cash flow from operations, revenue trend, margins, debt level, then the notes. The notes are where accounting policies, unusual items and risks are actually described.

  • One-off items repeated every year are not one-off.
  • Compare cash from operations against reported profit; a persistent gap is a question.

Limits

Accounts are a model, built on estimates for depreciation, provisions and valuations. Two honest companies can report different numbers for the same events, which is why the notes matter.