Finance is empowering. It enables innovation. It empowers big risk takers and bold builders and makes the world better. Finance pulls the future forward.
Finance is a critical in-demand career skill. It starts with being able to read and understand financial statements.
Becoming familiar with financial statements and how they are interconnected and flow is a critical skill set for enhancing your career and understanding of business.
Financial statements also underlay Discounted Cash Flow analysis, NPV, IRR, and all the valuation techniques of finance. Therefore, we should spend some time thoroughly understanding financial statements.
Knowing how to read and understand financial statements is a business skill you can’t ignore. Understanding finance fundamentals can help you work your way up the corporate ladder by communicating with others in your company and understanding the big picture. Knowing where your efforts and work can make the most impact is also a helpful skill that financial decision-making tools enable.
When you are thinking about possibly changing jobs and working for a company, you can check their financials and make sure they are a healthy organization. Likewise, if you consider starting your own company, you will need to have your accountant’s financials prepared to talk to investors, bankers, and vendors.
If you want to invest wisely in the stock market, analyze the competition or benchmark your performance, you can look up the financials of any publicly traded company at the Securities and Exchange Commission website’s EDGAR filings and get an idea of how they are doing. But, first, check out any public company’s most recent 10K filing there. A 10K is the Annual Report of the company and its most important business and financial disclosure document.