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Investing classroom: Financial statements

Stocks lesson 1.7: Our latest investing lesson looks at understanding the financial health

Morningstar 30.10.2009

Although the words "financial statements" and "accounting" send cold shivers down many people's backs, this is the language of business, a language investors need to know before buying stocks. The beauty is you don't need to be a banker to understand the basics of the three most fundamental and important financial statements: the income statement, the balance sheet, and the statement of cash flows.

The financial statements are windows into a company's performance and health. We'll provide a very basic overview of each financial statement in this lesson and go into much greater detail in later on.

The income statement

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