5 points that should not be missed if you want to analyze the financial statements.

Analyzing the financial statements will help to know the operating results of interested companies whether they are really good or not. Is it good for long-term speculation or short-term? This article will bring everyone to notice 5 important points that should be noted well. before making a decision

1) Look at the balance sheet structure.

If any company has more than 2 times the total debt compared to the shareholders' equity should be careful Because this point will indicate that the liquidity is not good. And if the operating cash flow is negative then the more you have to be careful Due to the negative cash flow in the future may need to increase capital. or have the right to go bankrupt

2) Revenue and profit

If profits and revenue are increasing and the rate is consistent, it should be kept an eye on. But if there is an uneven rate, you have to go back and look at the earnings explanation again to see what the reason is.

3) Business cash flow

Cash flow (CFO) should be positive or close to the net profit in profit and loss. This shows the liquidity of the company that the money invested will pay off. The cash flow (CFI) must be negative as investments are ongoing. And the cash flow (CFF) must be negative because the company pays debt or dividends.

4) ROE

It tells how much profit the company generates for its shareholders. Good value requires consistency. which can be separated into 3 more components, namely Debt to Equity Ratio will look at debt This section should be consistent. Next is the asset turnover ratio. will look at the assets of the company Like the first part, it must be consistent. and the last part is net profit margin to tell how much the remaining money will be deducted from expenses It's the same with the first 2 parts. values must be consistent

5) P.E.

This section is used to measure how cheap and expensive a stock is. Stocks with this value are higher than 20 times, indicating that in the future it will be very profitable. But if this value is low, be careful when investing that the profit may not come from the operation. Highest earnings of stocks or profit tends to be low But if it doesn't meet the criteria mentioned above, it means that the shares bought at the middle price are not very profitable. But still enough to eat dividends

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