Reading Financial Reports For Dummies
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Business investors don’t rely solely on financial reports when making investment decisions. Analyzing a business’s financial reports is just one part of the process. You should consider several additional factors, depending on the business you’re thinking about investing in.

These factors include the following:

  • Industry trends and problems

  • National economic and political developments

  • Possible mergers, friendly acquisitions, and hostile takeovers

  • Turnover of key executives

  • Labor problems

  • International markets and currency exchange ratios

  • Supply shortages

  • Product surpluses

This kind of stuff goes way beyond accounting, obviously, and is just as significant as financial statement analysis when you’re picking stocks and managing investment portfolios.

Investors in securities of public businesses have many sources of information at their disposal besides the business’s financial reports. For example, they may rely on stockbrokers or the financial press — including financial news programs on television and financial talk shows on radio.

Many individual investors turn to their stockbrokers for investment advice. Brokerage firms put out all sorts of analyses and publications, and they participate in the placement of new stock and bond securities issued by public businesses.

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